This book addresses researchers, practitioners, and policy makers interested in understanding the financial implications of mega-disaster risks as well as in seeking possible solutions with regard to governance, the allocation of financial risk, and resilience. The first part of this book takes the example of Japan and studies the impact of mega earthquakes on government finance, debt positions of private household and businesses, capital markets, and investor behavior by way of economic modeling as well as case studies from recent major disasters. In Japan, the probability of a mega earthquake hitting dense agglomerations is very high. Like other large-scale natural disasters, such events carry systemic risks, i.e., they can trigger disruptions endangering the stability of the social, economic, and political order. The second part looks at the experience of the Japanese government as a provider of disaster-risk finance and an active partner in international collaboration. It concludes with an analysis of the general characteristics of systemic risk and approaches to improve resilience.

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zlib/Business & Economics/Akiko Kamesaka, Franz Waldenberger/Governance, Risk and Financial Impact of Mega Disasters: Lessons from Japan_5402743.pdf

455382_1_En_Print.indd

Kamesaka, Akiko; Waldenberger, Franz

Pagination_Cover

Edward McDonald

Springer Science + Business Media Singapore Pte Ltd

Springer Nature Singapore

Economics, law, and institutions in Asia Pacific, 1st ed. 2019, Singapore, 2019

Springer Nature, Singapore, 2019

Singapore, Singapore

Nov 24, 2019

3, 20191123

sm78740162

producers:
Acrobat Distiller 10.0.0 (Windows)

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Source title: Governance, Risk and Financial Impact of Mega Disasters: Lessons from Japan (Economics, Law, and Institutions in Asia Pacific)

Preface 6
Contents 7
Editors and Contributors 8
1 Financial Impact of Mega Disasters 11
1 Introduction 11
1.1 Background 11
1.2 Insuring Against Earthquake Risk 13
1.3 Investor Behavior 15
1.4 Outline of the Book 17
1.5 Concluding Remarks 20
References 21
2 Japan’s Disaster Risk Financing: Framework and Policies 23
1 Introduction 23
2 Basic Frameworks for DRM and DRF in Japan 24
3 Earthquake Insurance 28
3.1 Origin 28
3.2 Structure 30
3.3 Three-Tiered Burden-Sharing System 32
3.4 Activation Record 35
4 Fiscal Framework for Recovery and Reconstruction from Earthquakes 35
4.1 Great Hanshin–Awaji Earthquake (1995) 37
4.2 Great East Japan Earthquake (2011) 38
4.3 Kumamoto Earthquake (2016) 39
4.4 Summary 40
5 Japan’s Efforts to Promote DRF in the International Arena 40
6 Conclusion 43
References 43
3 Analysis of the Possible Impact of a Tokyo Mega Earthquake on Japanese Public Finance 45
Appendix 55
References 56
4 Law and Policy Responses to Disaster-Induced Financial Distress 57
1 Japan’s 2011 Tsunami and Post-disaster Debt 57
2 Double-Loans as a Key Challenge for Financial Recovery 60
3 Financial Law and Policy Responses 64
3.1 Loan Deferments and Debt Factoring 65
3.2 Private Liquidations 67
3.3 Consumer Credit 69
3.4 Charity Money 70
3.5 Housing Aid, Government Loans and Subsidies 71
4 Discussion of the Responses to Disaster-Induced Financial Distress 74
4.1 Limited Effectiveness and Efficiency 75
4.2 Social Justice and Social Injustice 78
4.3 Suggestions for Improvement 82
References 85
5 How the Capital Market Reacted to the Great East Japan Earthquake: A Risk Perspective 91
1 Introduction 91
2 Disasters and the National Economy: Not Such a Great Impact? 92
3 Impact of the Great East Japan Earthquake from the Credit Risk Perspective 93
4 Impact of the Great East Japan Earthquake from the Market Risk Perspective: The Case of Electric Power Companies 95
4.1 Analysis by Stochastic Beta Under State Space Model 97
5 Impact of the Great East Japan Earthquake from the Market Risk Perspective: Do Insurance Companies Gain Anything from Disasters? 103
6 Summary and Conclusion 104
References 105
6 Systemic Risks: Common Characteristics and Approaches for Improving Resilience 107
1 Introduction 107
2 Major Characteristics of Systemic Risks 109
3 Systemic Risk Evaluation 111
3.1 Inclusion of Additional Evaluation Criteria 111
3.2 Risk Classification: Six Different Risk Classes 112
4 Systemic Risk Management 115
4.1 Addressing Complexity, Uncertainty and Ambiguity 115
4.2 Instrumental Processing Involving Governmental Actors 117
4.3 Epistemic Processing Involving Experts 118
4.4 Reflective Processing Involving Stakeholders 118
4.5 Participative Processing Involving the Wider Public 120
5 Conclusions 122
References 123

This book addresses researchers, practitioners, and policy makers interested in understanding the financial implications of mega-disaster risks as well as in seeking possible solutions with regard to governance, the allocation of financial risk, and resilience. The first part of this book takes the example of Japan and studies the impact of mega earthquakes on government finance, debt positions of private household and businesses, capital markets, and investor behavior by way of economic modeling as well as case studies from recent major disasters. In Japan, the probability of a mega earthquake hitting dense agglomerations is very high. Like other large-scale natural disasters, such events carry systemic risks, i.e., they can trigger disruptions endangering the stability of the social, economic, and political order. The second part looks at the experience of the Japanese government as a provider of disaster-risk finance and an active partner in international collaboration. It concludeswith an analysis of the general characteristics of systemic risk and approaches to improve resilience.
Erscheinungsdatum: 03.12.2019

Front Matter ....Pages i-xi
Financial Impact of Mega Disasters (Franz Waldenberger, Akiko Kamesaka)....Pages 1-12
Japan’s Disaster Risk Financing: Framework and Policies (Takahiro Tsuda)....Pages 13-34
Analysis of the Possible Impact of a Tokyo Mega Earthquake on Japanese Public Finance (Motohiro Sato)....Pages 35-46
Law and Policy Responses to Disaster-Induced Financial Distress (Julius Weitzdörfer, Simon Beard)....Pages 47-80
How the Capital Market Reacted to the Great East Japan Earthquake: A Risk Perspective (Soichiro Moridaira)....Pages 81-96
Systemic Risks: Common Characteristics and Approaches for Improving Resilience (Ortwin Renn)....Pages 97-114

2019-11-25