Banking, Capital Markets and Corporate Governance

PHILIPPE AGHION Professor of Economics, University College LondonPATRICK BOLTON Professor of Economics, Department of Economics, Princeton UniversityJAMES A. BRICKLEY Gleason Professor of Business Administration, Simon School of Business, University of RochesterJEFFREY L. COLES Professor of Finance, College of Business, Arizona State UniversityGABRIELLE DEMANGE Researcher, DELTA, ParisSTEVEN FRIES Director of Policy Studies, European Bank for Reconstruction and Development, LondonGERALD T. GARVEY Professor of Economics and Finance, Faculty of Commerce and Business Administration, University of British ColumbiaMASAHARU HANAZAKI Economist, Japan Policy and Investment BankAKIYOSHI HORIUCHI Professor of Economics, University of TokyoGUY LAROQUE Director des Études et Synthèses Économiques, INSEE, FranceJAMES S. LINCK Assistant Professor of Business Administration, University of GeorgiaAMIN MAWANI Professor of Economics and Finance, Faculty of Commerce and Business Administration, University of British ColumbiaKUZUHIKO ÕHASHI Associate Professor of Finance, Hitotsubashi UniversityHIDEO OKAMURA Lecturer, Department of Economics, Kansai University, JapanMASAHIRO OKUNO-FUJIWARA Professor of Economics, University of TokyoMICHELL J. WHITE Professor of Economics, University of MichiganNORIYUKI YANAGAWA Associate Professor, Department of Economics, University of Tokyo

• Preface Notes on the Contributors Introduction; H.Osano & T.Tachibanaki PART I: BANKING Liquidity Demand of Corporate Sector and Soft Budget Constraint; N.Yanagawa Incentive Effects of Conditional Bank Recapitalization: Lending and Disclosure of Non-Performing Loans; P.Aghion, P.Bolton & S.Fries Injection of Public Funds into Banks under Deposit Insurance and Bank Regulation; H.Osano Governance Structure of Banks and Their Business Performance; T.Tachibanaki & H.Okamura A Vacuum of Governance in the Japanese Bank Management; M.Hanazaki & A.Horiuchi PART II: CORPORATE GOVERNANCE Corporate Bankruptcy; M.J.White Executive Option Plans and Incentives to Take Risk in Levered Firms: Equity Value or Firm Value Maximization?; G.T.Garvey & A.Mawani Does the Decision to Retain Retiring Executives on the Board of Directors Help to Control Agency Problems in American and Japanese Firms?; J.A.Brickley, J.L.Coles & J.S.Linck PART III: CAPITAL MARKET Viable Design of a Security with a Pre-existing Market; K.Õhashi Investment, Security Design and Information; G.Demange & G.Laroque PART IV: GENERAL COMMENTS Mashiro Okuno: Fujiwara Index