Japan Financial Crisis Case Study

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Anita Puji Evianti 008201400011 Taxation Class MID TERM INDIVIDUAL PROJECT RISK MANAGEMENT THE CRISIS IN JAPANESE BANKS The crisis in Japan happened in early of 1990s until 2000. It was caused by abnormality in Japanese economic system that has sparked big wave of speculation by Japanese banks in late of 1980s. Land values combination which was very high and very low the interest rate caused good credit position easily available and very cheap. In this essay, I will elaborate the cause and effect of the crisis in Japanese banks. Good credit position caused big loan, invested result in the country and most of stocks and foreign securities. It is called as asset price inflation. Asset price inflation in Japan is bubble economy in Japan from year…show more content…
It raised bubble in spectacular mode, which caused massive crash in stock market. The fall of asset bubble in Japan in 1991 caused low economic growth and lingered until 2000. It also caused loan crisis; most of big loans which has run above changed badly, which in turn caused crisis in banking sector, with many banks ought to be redeemed by government. The real cause from this crisis was due to unhealthiness of speculation, high rates of credit and low of interest rate. When government attempted to handle it, the credit was more difficult to obtain, and the inclusion of capital decreased drastically. This has led to the weakening of economic expansion along 1990s, making one missing…show more content…
Impact on daily life has been rather heard, but unemployment runs high enough, but was not on crisis level. It was combined with emphasize on Japanese traditional skimp and saving to produce quite limited impact on average of Japanese family, which held many as done in magical period. Japan luckily can avoid depression, but the effect in the 1991is still felt until today. Several observers believe this event will be repeated in western if the economic system is not repaired soon. Crisis started to grind Japanese banking business. Even, bank with the biggest of asset size was precisely the most desperate looking for loop hole in order to boost performance. Slowing loan demand in the residential sector and industry made the banking industry racked his brain. A business area in the country is considered less promising again. As one of the initiative, finally banking Sakura country is targeting overseas markets. This opportunity is taken to utilize the condition has a serious rival European banking dying crisis struck

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