Chapter

Main Banks and the Governance of Financial Distress

Paul Sheard

in The Japanese Main Bank System

Published in print February 1995 | ISBN: 9780198288992
Published online August 2004 | e-ISBN: 9780191601224 | DOI: http://dx.doi.org/10.1093/0198288999.003.0006
 Main Banks and the Governance of Financial Distress

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This chapter examines the role of main banks in the governance of firms in financial distress, based on evidence from the high growth period in the 1960s. The main bank system efficiently handles the problems of firms in distress. When they intervene, they do so quickly and effectively; their intervention is targeted, selective, and appropriate. Protracted disruptive creditor disputes are rare, since main bank support maintains the intangible asset base of the firm.

Keywords: Japanese main bank system; financial distress; main bank incentives; governance; corporate financing

Chapter.  19759 words. 

Subjects: Financial Markets

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