Do Bubbles Equally Affect Japanese Bank Performance?

Abstract

Japanese banks experienced severe adverse shocks during the post bubble period due to the collapse of the so-called bubble economy. This paper investigates the performance of Japanese bank stocks in the bubble period and post-bubble period. We show in this article that in the case of Japan there is a clearunequal link between bubbles and the post bubble period's bank stock performance. We found that banks that did better during'the bubble period performed worse over the 1990-1998period. This result must be'dependent on the lending behavior of banks during the bubble economy.