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 debated due to a lack of any convincing identification strategy of the supply side capital-lending...

In this paper, we utilize a hand gathered, bank specific database covering the period 1993 to 2007 to empirically examine the reactions of individual Japanese banks to governmental policies designed to end Japan's financial crisis. Our unique database allows us to examine the composition of...