Since August 1995, Japanese banks have had to pay a premium on Eurodollar and Euroyen interbank loans relative to their U.S. and U.K. competitors. This so-called Japan premium' provides a market indicator of investor anxiety about the ability of Japanese banks to repay loans. We examine the...

This study examines the misallocation of credit in Japan associated with the perverse incentives of banks to provide additional credit to the weakest firms. Firms are far more likely to receive additional credit if they are in poor financial condition, and these firms continue to perform poorly...

The increase in real estate lending was a major reason for the rapid expansion of New England banks during the 1980s. When nominal real estate prices began to decline in New England, collateral became impaired and many loans stopped performing. The consequent increased provision for expected...

The wave of bank and savings and loan failures in the 1980s and early 1990s, and the resulting losses to deposit insurance funds, served to highlight the need for banks to hold sufficient capital to survive difficult times. In addition, many argued that deposit insurance reduces the market...

New England's recovery from our most recent recession has been marked by unusually slow growth in bank lending. As of the third quarter of 1994, total loans still had recovered only to 76 percent of the level attained at the peak in the third quarter of 1989. Numerous recent studies have...

To improve our understanding of the role of banks in the transmission of monetary policy, the Federal Reserve Bank of Boston convened a conference in June of 1995 to consider the question, "Is Bank Lending Important for the Transmission of Monetary Policy?" That banks are an important element in...

Locating the function of bank supervision in the central bank has been a contentious issue, both domestically and internationally. Most discussions of the role of bank supervision in central banking have focused on crisis management and the responsibilities of the central bank as a lender of...