KEIRETSU AND RISK: AN EXAMINATION OF THE RISK EXPOSURE OF KEIRETSU BANKS IN JAPAN

From: Journal of Economics and Finance | Date: July 1, 2007| Author: Suetorsak, Rungrudee | Copyright information

Abstract

We compare risk positions adopted by keiretsu and non-keiretsu banks in Japan and examine how the risk positions of Japanese banks changed following the conclusion in 1997 of an escalating series of banking crises in Japan and East-Asia. The results indicate that keiretsu banks take less risk than non-keiretsu banks, and that Japanese banks in general adopted lower risk profiles after 1997. Japanese bank risk is positively associated with the ratio of non-performing loans to c...

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