TY  - JOUR
AU  - Doi, Takero
AU  - Hoshi, Takeo
TI  - Paying for the FILP
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 9385
PY  - 2002
Y2  - December 2002
DO  - 10.3386/w9385
UR  - http://www.nber.org/papers/w9385
L1  - http://www.nber.org/papers/w9385.pdf
N1  - Author contact info:
Takero Doi
Faculty of Economics
Keio University
Mita 2-15-45, Minato-ku
Tokyo 108-8345
JAPAN
Tel: +81-3-3453-4511
Fax: +81-3-5427-1578
E-Mail: tdoi@econ.keio.ac.jp

Takeo Hoshi
University of Tokyo
7-3-1 Hongo
Bunkyo-ku, Tokyo 113-0033
Japan
Tel: +81-3-5841-5611
E-Mail: hoshireiwa@gmail.com
M1  - published as Takero Doi, Takeo Hoshi. "Paying for the FILP," in Magnus Blomström, Jennifer Corbett, Fumio Hayashi and Anil Kashyap, editors, "Structural Impediments to Growth in Japan" University of Chicago Press (2003)

AB  - This paper examines the financial health of the Fiscal Investment and Loan Program (FILP) as of the end of March 2001. We study the financial conditions of FILP recipients, which include public corporations and local governments. We find many are de facto insolvent. Our estimates suggest as much as 75% of the FILP loans are bad. The expected losses are estimated to be about ?75 trillion (over 15% of GDP). We also studied the effects of the FILP reform of April 2001, which tries to introduce market discipline in allocation of FILP funds. No significant changes in financial flow are detected, yet. The financial market seems to differentiate the newly introduced FILP agency bonds, which are supposed to without government guarantee, from government guaranteed bonds. It is too early to tell, however, whether the financial market will become an effective monitor of FILP agencies.
ER  -