Rise & Fall of Abacus Banking in Japan & China

Bankers in Japan and China are masters of accounting, not risk management, and American-style rescue packages won't solve their banking crises. Cleaning up balance sheets and purging non-performing loans won't work either, say Arayama and Mourdoukoutas. The problem goes deeper. It stems from high growth environments and tight government regulation. The result has been to limit competition in Japan and eliminate it in China. And that led to the control of management behavior, which weakened incentives for Japanese and Chinese bank decision makers to manage, hands-on, their traditional and nontraditional banking risks. They may be experts with the abacus but they have little experience with or understanding of the other more important aspects of banking. A challenging, provocative, readable study and analysis it is, an essential resource for academicians and policymakers in business, government, and international finance and investment.