Unnatural Selection: Perverse Incentives and the Misallocation of Credit in Japan
| Autor: | Joe Peek, Eric S. Rosengren |
|---|---|
| Rok vydání: | 2005 |
| Předmět: |
Economics and Econometrics
050208 finance jel:E51 05 social sciences 1. No poverty Monetary economics jel:G21 Evergreening Bank credit Incentive Order (exchange) 0502 economics and business 8. Economic growth Economics Selection (linguistics) Capital requirement Balance sheet 050207 economics ComputingMilieux_MISCELLANEOUS |
| Zdroj: | American Economic Review. 95:1144-1166 |
| ISSN: | 0002-8282 |
| Popis: | This study examines the misallocation of credit in Japan associated with the perverse incentives of banks to provide additional credit to the weakest firms. Firms are far more likely to receive additional credit if they are in poor financial condition, and these firms continue to perform poorly after receiving additional bank financing. Troubled Japanese banks allocate credit to severely impaired borrowers primarily to avoid the realization of losses on their own balance sheets. This problem is compounded by extensive corporate affiliations, which provide a further incentive for banks to allocate scarce credit based on considerations other than prudent credit risk analysis. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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