Peek and Rosengren (American Economic Review 2005; 95) suggested the mechanism of ``unnatural selection,'' where low-capitalized Japanese banks increase credit to low-quality firms because of their motivation to pursue balance sheet cosmetics. In this study, we replicate their estimation results,...

We examine the reason why two opposing views on distressed banks' lending behavior in Japan's postbubble period have coexisted: one is stagnant lending in a capital crunch and the other is forbearance lending to low-quality borrowers. To this end, we address the measurement problem for bank...

In this study we use a matched dataset of Japanese banks and firms to examine how bank-driven terminations of bank-borrower relationships affect the investments of the borrowers. We find that bank-driven terminations significantly decrease investment, exerting an effect that exceeds that due to...

We investigate the effects of unconventional monetary policy on bank lending, using a bank-firm loan-level matched dataset from 1999 to 2015 by extracting exogenous changes in unconventional monetary policies over the past 20 years in Japan. We find that an increase in the share of...

This paper proposes a method for identifying quantitative and qualitative monetary policy shocks in the balance sheet operations of a central bank. The method is agnostic and flexible as it relies on no assumptions on how the size and composition of the central bank's balance sheet will respond...

Examining a loan-level matched sample of Japanese banks and firms, we study the factors determining the termination of bank-firm relationships. We find that such terminations are mainly driven by bank factors, and that these bank-driven terminations increase when the banks' capital conditions...