Prudential Regulation, the Credit Crunch" and the Ineffectiveness of Monetary Policy: Evidence from Japan

The underlying causes of sharp declines in bank lending during recessions in large developed economies, as exemplified by the U.S. in the early 1990s and Japan in the late 1990s, are still being debated due to a lack of any convincing identification strategy of the supply side capital-lending relationship with lending demand. This paper is a first attempt to construct a strong instrument for bank capital from empirical observation of the banks' behavioral changes in the past and to estimate the impact of capital adequacy on the lending supply. The implications of prudential regulation and the ineffectiveness of a loose monetary policy are discussed based on the micro evidence presented.

Income Uncertainty and Self-Reported Precautionary Wealth: Evidence from the Japanese Micro Data

Using unique survey data which includes information on precautionary wealth and its target, we analyze the precautionary saving behavior of Japanese households. Our findings are: 1. Measures for income uncertainty have a positive influence on the target for precautionary wealth but not on precautionary wealth. 2. The positive influence of income uncertainty on the target vanishes when older households with a head aged 51 or older are included in the sample. These findings suggest that Japanese households save against income uncertainty until around when their head is aged 50 and then save against other risks such as the longevity risk.

An Ising-Like model for protein mechanical unfolding

The mechanical unfolding of proteins is investigated by extending the Wako-Saito-Munoz-Eaton model, a simplified protein model with binary degrees of freedom, which has proved successful in describing the kinetics of protein folding. Such a model is generalized by including the effect of an external force, and its thermodynamics turns out to be exactly solvable. We consider two molecules, the 27th immunoglobulin domain of titin and protein PIN1. In the case of titin we determine equilibrium force-extension curves and study nonequilibrium phenomena in the frameworks of dynamic loading and force clamp protocols, verifying theoretical laws and finding the position of the kinetic barrier which hinders the unfolding of the molecule. The PIN1 molecule is used to check the possibility of computing the free energy landscape as a function of the molecule length by means of an extended form of the Jarzynski equality.Comment: 4 pages + appendi

The first determination of the actinide Th abundance for a red giant of the Ursa Minor dwarf galaxy

The Thorium abundance for the red giant COS82 in the Ursa Minor dwarf spheroidal galaxy is determined based on a high resolution spectrum. This is the first detection of actinides in an extra Galactic object. A detailed abundance pattern is determined for 12 other neutron-capture elements from the atomic number 39 to 68. These elements are significantly over-abundant with respect to other metals like Fe (> 1 dex) and their abundance pattern agrees well with those of the r-process-enhanced, very metal-poor stars known in the Galactic halo, while the metallicity of this object ([Fe/H] ~ -1.5) is much higher than these field stars ([Fe/H] ~ -3.0). The results indicate that the mechanism and the astrophysical site that are responsible for neutron-capture elements in COS82 is similar to that for field r-process-enhanced stars, while the condition of low mass star formation is quite different. An estimate of the age of this object based on the Th abundance ratio is discussed.Comment: 5 pages, 2 figures, 1 table, to appear in PAS

Bank Size and Lending Relationships in Japan

Current theoretical and empirical research suggests that small banks have a comparative advantage in processing soft information and delivering relationship lending. The most comprehensive analysis of this view found using U.S. data that smaller SMEs borrow from smaller banks and smaller banks have stronger relationships with their borrowers (Berger, Miller, Petersen, Rajan, and Stein 2005) (BMPRS). We employ essentially the same methodology as BMPRS on a unique Japanese data set and obtained findings that are quite interesting from an international comparison point of view. We found like BMPRS that larger firms tend to borrow from larger banks. However, unlike BMPRS we did not find that this was because larger firms are more transparent. Together these results imply that large banks do not necessarily have a comparative advantage in extending transactions-based lending. We also found like BMPRS that smaller banks have strong relationships with their borrowers. However, we find that banking relationships in the U.S. and Japan are strong in somewhat different dimensions. Our paper clarifies these and other interesting similarities and differences between the U.S. and Japan.