Too Big to Fail: the Panic of 1927

Yokoyama, Kazuki (2007): Too Big to Fail: the Panic of 1927.

Abstract

The purpose of this paper is to explore whether the Bank of Japan provided the special loans for insolvent banks against the panic of 1927. This paper uses a cross-sectional data set consisting of observations on 1364 ordinary banks. The logit model regression at this paper provides each bank’s estimated propensity to close. And the results of the tobit model regressions imply that supported banks had higher closure risk or occupied key positions in the local loan-markets and that the bank bailouts may have reflected political factors to some extent.

• Item Type: MPRA Paper
• Institution: Graduate School of Economics, Nagoya City University
• Language: English
• Keywords: lender of last resort (LLR); too big to fail; the panic of 1927; bank closure risk; bank bailouts
• Subjects: G - Financial Economics > G2 - Financial Institutions and Services > G28 - Government Policy and Regulation; G - Financial Economics > G2 - Financial Institutions and Services > G21 - Banks ; Depository Institutions ; Micro Finance Institutions ; Mortgages; N - Economic History > N2 - Financial Markets and Institutions > N25 - Asia including Middle East

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