The Bank of Japan Creates a State-Led Monopolistic Banking System

by Taiki Murai and Gunther Schnabl[*] In the second half of the 1980s, 13 Japanese city banks climbed into the group of the world's largest banks, boosted by a domestic speculation boom. With the bursting of the Japanese financial “bubble” in the early 1990s, a gradual decline followed. Since then, the Japanese city banks have …

The Revival of State Banking in Europe

by Alexander Fink[1] and Andreas Hoffmann Since 2009, the role of government in banking has increased substantially in Europe. This is, first, a consequence of capital injections or bailouts of private banks (for instance Dexia in Belgium, Royal Bank of Scotland in the UK, Hypo Real Estate and Commerzbank in Germany, Fortis in the Benelux, …

Limited Purpose Banking?

by Jerry O’Driscoll   The following is a book review from the Cato Journal, Vol. 30, No. 3 (Fall 2010).   Jimmy Stewart Is Dead: Ending the World’s Ongoing Financial Plague with Limited Purpose Banking Laurence J. Kotlikoff      (Hoboken, N.J.: John Wiley & Sons, 2010, 241 pp.)   Chapter 1 of the book is titled “It’s a Horrible …

Banking 666: Advanced Analysis

by Mario Rizzo This is your final exam. Question: Suppose you are a profit-maximizing bank, which course of action do you take: (a) Lend $1 million to Herman Dilbert's Chicken Finger Brasserie or (b) Buy $1 million in 10 year 3.5% Treasuries? Answer under the fold. If you answered (b) then your job at XYZ …