Shareholding in the keiretsu, Japan's financial groups

Article Abstract:

Banks hold a large proportion of shares in the keiretsu financial groups in Japan, purportedly decreasing financial intermediation costs and resolving problems with agencies. More stock is held by the largest keiretsu debtholders when the member firms have high growth potential, weak collateral or large debt to equity ratios. The same firms also subsequently borrow more. Japanese banks not only hold shares in the keiretsu companies, keiretsu presidents' councils members possibly have better arrangements with banks than other Japanese companies.

Economic aspects, Japan, Stockholders, Capital stock, Keiretsu system, Debt financing (Corporations), Debt financing, Debt equity conversion

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Bank capitalization and cost: evidence of scale economies in risk management and signaling

Article Abstract:

Financial capital plays a vital role in banking and financial intermediation. Financial capital is used by risk-averse bank managers to signal and restrict risk. With the help of labor and physical capital, advancement in financial capital level also helps in enhancing risk management and in securing capital. Utilization of a standard cost function also revealed that costs associated with the use of financial capital decrease as bank asset increases.

Risk management, Economies of scale

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The efficiency cost of market power in the banking industry: a test of the "quiet life" and related hypotheses

Article Abstract:

A relationship exists between concentrated markets and low operating efficiency. Estimates of the efficiency of more than 5000 banks and measures of local market concentration revealed that banks operating in more concentrated markets tend to have lower cost efficiency. Additional operating cost due to market concentration tends to be several times greater than the social loss due to bank outputs' noncompetitive pricing.

Economics, Research and Development in the Social Sciences and Humanities, Efficient market theory, Cost (Economics), Costs (Economics)

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