Tang, Yutao
(2019)
Analysis of factors affecting the credit risk of Japanese commercial banks.
[Dissertation (University of Nottingham only)]
Abstract
In modern society, commercial bank has become an indispensable financial intermediary in every country, which regulates the financial capital resources of the country.Undeniably, the banking boom or bust is also an indirect indicator of national economic strength.
Credit risk is one of the risks that have negative effects on commercial Banks, which is also discussed in this paper.In the 1990s, Japan's economy suffered a great blow. With the collapse of the bubble economy in Japan, many enterprises closed down, and the unemployment rate also increased rapidly, and the GDP also showed negative growth. Unfortunately, a large number of Banks ran a deficit because the enterprises could not pay their debts on time. What causes such a huge credit risk? By analyzing important literatures of different scholars, this paper analyzes a series of factors that may cause credit risk, and analyzes the changes of these data in 10 years after 2008 through panel data for further discussion.In terms of data selection, the dependent variable adopts NPL, which is generally agreed by most scholars. Among all the factors, the natural logarithm method is adopted because the data of total assets and NPL are too large. In the end, it is not difficult to find that in all data at the bank level, the size of Banks often has a great impact on the non-performing loans of Japanese commercial Banks. On the other hand, at the macro level, the unemployment rate and GDP growth have a significant impact on the non-performing loans.
Additionally, this study shows that Japan's economy is gradually coming out of the shadows, but they must focus on issues such as unemployment rate, GDP growth, balance of bank size and management, and exchange rate if they are to avoid repeating such mistakes.
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