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Full-Text Articles in Finance and Financial Management

Financial Functions Stabilization Act, Vaasavi Unnava Nov 2021

Financial Functions Stabilization Act, Vaasavi Unnava

Journal of Financial Crises

In 1990, the asset-pricing bubble in Japan peaked and began a steady decline. Over the next seven years, a series of bank failures induced the Japanese government to introduce the first of a series of capital injections in 1998, 1999, and 2004. The capital injection of 1998, authorized by the Financial Functions Stabilization Act, made ¥13 trillion ($103 billion) available to financial institutions that applied. By the end of the injection window, 21 banks and trusts applied for and received ¥1.8 trillion ($13.5 billion) in subordinated debt and loans and preferred shares. While there were no limits on compensation for …


Prompt Recapitalization Act, Vaasavi Unnava Nov 2021

Prompt Recapitalization Act, Vaasavi Unnava

Journal of Financial Crises

In 1997, Japan’s banks were in crisis due to hundreds of billions of dollars of non-performing real estate loans. In response, the government performed three rounds of capital injections in 1998, 1999, and the early 2000s. The capital injection of 1999, authorized by the Prompt Recapitalization Act, made as much as ¥25 trillion ($208 billion) available to financial institutions that applied, regardless of their capitalization. By the end of the injection window, 32 banks and trusts applied for and received ¥8.6 trillion ($71.6 billion) total in preferred shares and subordinated debts. The Act required banks to submit and adhere to …


Skbi Big 5 Survey 2021 August, Singapore Management University Aug 2021

Skbi Big 5 Survey 2021 August, Singapore Management University

Sim Kee Boon Institute for Financial Economics

The latest survey results convey an upshift in growth projections of the five largest economies in aggregate accompanied by higher inflation, especially this year and to a lesser extent next year. The aggregate “Big5” median real GDP growth projections for 2021 and 2022 were raised to 6.7% (up in US, CN and EA but down in IN and JP) and 4.9% (all except US), respectively. The overall “Big5” median CPI inflation forecasts were nudged up to 2.6% (higher in US, IN and EA but lower in CN) and 2.4% (in US, IN and EA some), respectively, for this year and …


The Resolution And Collection Corporation Of Japan, Mallory Dreyer Jun 2021

The Resolution And Collection Corporation Of Japan, Mallory Dreyer

Journal of Financial Crises

Though the Japanese real estate and stock market bubble burst in the early 1990s, the ensuing financial crisis in Japan did not reach a systemic level until 1997, when four large financial institutions failed in a single month. Because of their heavy exposure to real estate and equity markets, Japanese banks had a nonperforming loan (NPL) problem, which was prolonged, and private sector estimates of the scale of the NPL problem differed significantly from the official estimates. In response, the Japanese government created multiple asset management companies; the Resolution and Collection Corporation (RCC) was the result of the merger of …


Skbi Big 5 Survey 2021 February, Singapore Management University Feb 2021

Skbi Big 5 Survey 2021 February, Singapore Management University

Sim Kee Boon Institute for Financial Economics

The latest survey results suggest that the five largest economies collectively is projected to snapback to almost 6% in 2021, a modest upgrade from the August median, following an unprecedented preliminary contraction of roughly 4% last year (in real GDP terms). The 2022 median growth forecast of slightly above 4.5%, while slower, is still respectable, outstripping its pre-COVID 10-year average pace by more than half a percentage point. The aggregate upgrade in 2021, however, obscures the lopsided nature and highly uneven contour of the ongoing recovery. The bulk of the upward revision to growth was mainly due to IN (to …