• Corpus ID: 52846792

Do Government Guarantees of Bank Loans Lower , or Raise , Banks ’ Nonguaranteed Lending ?

  title={Do Government Guarantees of Bank Loans Lower , or Raise , Banks ’ Nonguaranteed Lending ?},
  author={James Allen Wilcox and Haas},
The government vastly increased loan guarantees and capital injections for banks during the late-1990s crisis in Japan. We model when loan guarantees would raise, or lower, nonguaranteed lending. We found that nonguaranteed loans to small businesses rose by more than guaranteed loans rose. We also found that capital, which was injected only into the largest banks, was associated with significant increases in their lending. Thus, both the capital injections and the “synthetic capital” generated… 


Bank Capital, Loan Delinquencies, and Real Estate Lending
Abstract This study estimated the relation of individual banks′ real estate loans to capital shortfalls, loan delinquencies, and local economic conditions. Capital shortfalls tended to reduce banks′
The Repercussions on Small Banks and Small Businesses of Procyclical Bank Capital and Countercyclical Loan Guarantees
Small businesses rely on banks for credit more than large businesses do. As a result, small business may be more adversely affected when adverse shocks, such as reduced bank capital or higher
Prudential Regulation and the “Credit Crunch”: Evidence from Japan
The underlying causes of sharp declines in bank lending during recessions in large developed economies, as exemplified by the U.S. in the early 1990s and Japan in the late 1990s, are still being
Promoting Enterprise Development or Subsidizing Tradition?
Governments and trade associations have often intervened in credit markets to guarantee loans made by financial institutions to small and medium-sized enterprises (SMEs). The most active loan
Accounting Information Quality and Government Guaranteed Loans: Evidence from Japanese SMEs
We empirically investigate the effects of accounting information quality, as measured by accruals quality, on the use of government guaranteed loans, which we regard as a form of transaction lending.
The Impact of Public Guarantees on Bank Risk Taking: Evidence from a Natural Experiment
The results suggest that banks whose government guarantee was removed reduced credit risk by cutting off the riskiest borrowers from credit, and banks that ex ante benefitted more from the guarantee increased interest rates on their remaining borrowers.