Banking Crisis in Japan
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Code : ECC0005
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Region : Japan |
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Introduction: For more than a decade since 1990, the Japanese banking industry has been plagued with bad loans and fast deteriorating value of its assets. The Japanese banks played a major role in the economic development of Japan during the post-war period between 1945 and 1973. In this period, the Japanese banks financed new corporations. Since all the savings were channeled into banks during this period, banks had enough cash to lend and restrictions on other options of financing turned these banks into prime financiers. This started to change in the 1970s when reforms in the financial sector began to take place. As part of the reform process, financial markets were deregulated and restrictions on the issuance of equities and bonds were eased to an extent. As themarkets opened up,major corporations in Japan, which till then depended on bank finance, shifted their focus to cheaper financing in the form of bonds and equity... |
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