Votermedia Finance Blog

October 12, 2008

Ideas from papers about failed Japanese banks

Filed under: Uncategorized — Mark Latham @ 4:50 pm

Thanks to my interest in Japan, I’ve already spent some time thinking and writing about how a leveraged financial system can overcome the dislocations caused by falling real estate prices. Japan went through that in the 1990s, and took more than 10 years to recover. In 1998 I started writing a paper entitled “How To Transform a Failed Japanese Bank”. I only wrote 4 pages and never published it, but in 2000 I published a summary in section 6 of “Corporate Governance in Japan: A Future Scenario”. Both papers are available at http://votermedia.org/publications.

Rereading those ideas, I think they can be usefully adapted as proposals for resolving the current U.S. crisis. So I plan to post some updated proposals in this blog, on these topics:

  • Tax reform
  • Recapitalizing a financial firm
  • Automatic incentive to issue equity
  • Corporate governance reform
  • Government guarantees of risky debt
  • Democratic governance reform
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