DID MERGERS HELP JAPANESE MEGA-BANKS AVOID FAILURE? ANALYSIS OF THE DISTANCE TO DEFAULT OF BANKS

In the late 1990s, several large Japanese banks failed for the first time in its postwar history. As the financial environment was deteriorating further, several remaining banks decided to merge among themselves, presumably, to make their operations more efficient to avoid failures. This paper defines, calculates and analyzes the distance to default (DD), a concept of credit r..