Title

Bank regulation and supervision in Japan and Germany: A comparison

Abstract

This paper describes and compares the regulation and supervision of banks in Japan and Germany. We have chosen these countries because they have both bank-dominated financial systems and belong to the same law tradition, yet, bank stability differs significantly. We ask to what extent these countries follow best practice regulations in banking and whether differences in banking stability and efficiency can be explained by regulatory and supervisory differences. We argue that bank regulation and supervision are less efficient in Japan than in Germany and show why Japan and Germany have made different regulatory and supervisory choices.

Keywords: Bank regulation and supervision
　　　　　　 Banking stability and banking efficiency
　　　　　 　deposit insurance
　　　　　　 Lender of last resort
　　　　　　 Forbearance
　　　　　　 Japan and Germany

JEL Classification: G21, G32

Ralf BEBENROTH
Research Institute for Economics and Business Administration
Kobe University
Rokkodai-cho, Nada-ku, Kobe
657-8501 Japan
Phone: (81) 78 803 7036
Fax: (81) 78 803 7059

Diemo DIETRICH
Halle Institute for Economic Research

Uwe VOLLMER
University of Leipzig