The Role of Long‐Term Credit Banks Within the Main Bank System

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Abstract
This chapter examines Japanese long-term credit banks, a special class of banks which do not rely on individual deposits as a principal source of financing. While the regulatory regime has allowed long-term credit banks to act as main banks to corporations when necessary, the use and exclusivity of the privilege of issuing financial debentures has assured them of a pre-eminent role in long-term finance. This has allowed long-term credit banks to limit the risks assumed by keiretsu banks in cooperative financing, and act as main banks themselves for a large number of companies.

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