2012 Fiscal Year Final Research Report
Analysis of government loan guaranteed program
| Project/Area Number |
22730261
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| Research Category |
Grant-in-Aid for Young Scientists (B)
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| Allocation Type | Single-year Grants |
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| Research Field |
Public finance/Monetary economics
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| Research Institution | Tokyo Keizai University |
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Principal Investigator |
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| Project Period (FY) |
2010 – 2012
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| Keywords | 信用保証制度 / リスクテイク / 預金保険制度 / 自己資本比率規制 / 免許価値 |
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| Research Abstract |
We analyzed theoretically and empirically the effects of Japanese government loan guarantees on banks’ non-guaranteed lending and risk-taking. Both theory and evidence further suggested that increasing loan guarantees gave banks incentives to take more risk. We also examine the effectiveness of Japan’s Emergency Credit Guarantee (ECG) program set up during the financial turmoil following the failure of Lehman Brothers. We find that the ECG program significantly improved credit availability for firms using the program. However, when it is a relationship lender (main bank) that extends an ECG loan, the increased availability is partially, if not completely, offset by a decrease in non-ECG loans by the same bank.
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