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International Finance Discussion Papers
The International Finance Discussion Papers logo links to the International Finance Discussion Papers home page Loans to Japanese Borrowers
Smith, David
2003-769  (July 2003)

Abstract:  This paper examines the characteristics of loans to Japanese borrowers using a relatively unexplored, contract-specific data set. I find that Japanese banks charge less on loans to Japanese borrowers than do foreign banks, holding constant many of the risk characteristics of the borrower. Moreover, Japanese banks vary pricing less across these risks than do foreign banks, suggesting that Japanese banks tend not to distinguish good risks from bad. Taken together, the results suggest that problems at Japanese banks stem from the behavior of the banks themselves, not simply from poor economic conditions. I also document a significant shortening in the maturity structure of Japanese loans in the late 1990s.

Full paper (248 KB PDF)

Keywords
Japanese banks, bank loans, syndicated lending

As Published Elsewhere
Forthcoming, Journal of the Japanese and International Economies

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Last update: July 14, 2003