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Japan’s financial regulatory responses to the global financial crisis

Japan’s financial regulatory responses to the global financial crisis Purpose – This paper aims to understand Japan’s financial regulatory responses after the global financial crisis and recession. Japan’s post-crisis reactions show two seemingly opposing trends: collaboration with international organizations to strengthen the regulation to maintain financial stability, and regulatory forbearance for the banks with troubled small and medium enterprise (SME) borrowers. The paper evaluates the responses by the Japanese financial regulators in five areas (Basel III, stress tests, over-the-counter (OTC) derivatives regulation, recovery and resolution planning and banking policy for SME lending) and concludes that the effectiveness of the new regulations for financial stability critically depends on the willingness of the regulators to use the new tools. Design/methodology/approach – This report evaluates the post-crisis responses by the Japanese financial authorities in five dimensions (Basel III, stress tests, OTC derivatives regulations, recovery and resolution planning and bank supervision). Findings – The effectiveness of the new regulations for financial stability critically depends on the willingness of the regulators to use the new tools. Originality/value – The paper is the first attempt to evaluate the financial regulatory trends in Japan after the global financial crisis. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Financial Economic Policy Emerald Publishing

Japan’s financial regulatory responses to the global financial crisis

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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
1757-6385
DOI
10.1108/JFEP-12-2014-0077
Publisher site
See Article on Publisher Site

Abstract

Purpose – This paper aims to understand Japan’s financial regulatory responses after the global financial crisis and recession. Japan’s post-crisis reactions show two seemingly opposing trends: collaboration with international organizations to strengthen the regulation to maintain financial stability, and regulatory forbearance for the banks with troubled small and medium enterprise (SME) borrowers. The paper evaluates the responses by the Japanese financial regulators in five areas (Basel III, stress tests, over-the-counter (OTC) derivatives regulation, recovery and resolution planning and banking policy for SME lending) and concludes that the effectiveness of the new regulations for financial stability critically depends on the willingness of the regulators to use the new tools. Design/methodology/approach – This report evaluates the post-crisis responses by the Japanese financial authorities in five dimensions (Basel III, stress tests, OTC derivatives regulations, recovery and resolution planning and bank supervision). Findings – The effectiveness of the new regulations for financial stability critically depends on the willingness of the regulators to use the new tools. Originality/value – The paper is the first attempt to evaluate the financial regulatory trends in Japan after the global financial crisis.

Journal

Journal of Financial Economic PolicyEmerald Publishing

Published: Apr 7, 2015

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