The sectoral analysis of credit direction and rationing in Japan from 1954 to 1991 : from the viewpoints of flow-of-funds accounts, financial reforms, and business investments

Tsukamoto, Shuhei. (2004). The sectoral analysis of credit direction and rationing in Japan from 1954 to 1991 : from the viewpoints of flow-of-funds accounts, financial reforms, and business investments Master's Thesis, School of Economics, The University of Queensland.

       
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Author Tsukamoto, Shuhei.
Thesis Title The sectoral analysis of credit direction and rationing in Japan from 1954 to 1991 : from the viewpoints of flow-of-funds accounts, financial reforms, and business investments
School, Centre or Institute School of Economics
Institution The University of Queensland
Publication date 2004
Thesis type Master's Thesis
Total pages 142
Language eng
Subjects 14 Economics
Formatted abstract This thesis examines (1) the long-term (indirect) effects of Window Guidance, which is credit direction from Bank of Japan (BOJ) to the bank sector and credit rationing for business loans from the bank sector to the business sector, on the total assets and total liabilities of the bank sectors and (2) how the business sector used their funds over time. It hypothesizes that Window Guidance can be one of the reasons that led (a) to the increase in business investment via business loans from the bank sector and (b) to the bubble in the real estate market around the late 8<fs to the beginning of 90/s via business loans and the speculative (fixed) investment of the business sector. In order to examine these effects, it analyses the flow-of-funds tables, which show the movement of funds among the sectors. The flows of money from BOJ to the bank sector and from the bank sector to the business sector in Japan from 1954 to 1991 are empirically analysed, which suggest that credit rationing was a stable source for the total assets of the bank sector, while credit direction was an unstable source for the total liabilities. From the middle of 19701s to the end of 907s, the financial system, including the bank sector, was reformed in order to deregulate, internationalize, securitize, and enlarge the financial system and the financial markets. Since these reforms affected the flow-of-funds tables, the reforms are investigated thoroughly when they happened and what was changed. Also, the uses of funds by the business sector are empirically analysed after the investigation of the behaviours and the characteristics of the business sector in Japan. It reveals that the business sector invested the funds mainly from the bank sector not only on physical capital but also heavily on land and other equity, which led to an upsurge in the price of equity. Two reasons for speculative behaviours of the business sector are examined.
Keyword Credit -- Japan.
Finance -- Japan.

 
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