Unnatural selection: Perverse incentives and the misallocation of credit in Japan

• 成果类型: Article
• 署名作者: Peek, J; Rosengren, ES
• 署名单位: University of Kentucky; Federal Reserve System - USA; Federal Reserve Bank - Boston
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/0002828054825691
• 发表日期: 2005
• 页码: 1144-1166
• 关键词: firm performance; INVESTMENT; banks; determinants; shocks; CRISIS; COSTS

摘要

We examine the misallocation of credit in Japan associated with the perverse incentives faced by banks to provide additional credit to the weakest firms. Finns are more likely to receive additional bank credit if they are in poor financial condition, because troubled Japanese banks have an incentive to allocate credit to severely impaired borrowers in order to avoid the realization of losses on their own balance sheets. This evergreening behavior is more prevalent among banks that have reported capital ratios close to the required minimum, and is compounded by the incentives arising from extensive corporate affiliations.