The impact of bank entry in the Japanese corporate bond underwriting market

Sumiko Takaoka, C. R. McKenzie

Research output: Contribution to journalArticlepeer-review

17 Citations (Scopus)


The 1993 Japanese financial system reform allowed banks to enter the underwriting market for corporate bonds through bank-owned security subsidiaries. This paper examines empirically whether underwriting commissions and yield spreads on corporate straight bonds issued domestically fell as a result of this bank entry. The empirical results show that bank entry significantly lowers both underwriting commissions and yield spreads. Commissions charged by banks are significantly lower than those charged by investment houses. Lending and shareholding relationships between the issuer and underwriter are not important in determining commissions or yield spreads.

Original languageEnglish
Pages (from-to)59-83
Number of pages25
JournalJournal of Banking and Finance
Issue number1
Publication statusPublished - 2006 Jan
Externally publishedYes


  • Bank entry
  • Commissions
  • Financial system reform
  • Underwriting
  • Yield spreads

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics


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