Asian Financial Crisis

The Japanese Crisis of 1990

In 1985-1987 the Japanese authorities have organized massed investing money into the economy. It was done by preferential crediting of commercial banks. And so, the discount rate of Bank of Japan those years was lowered from 5 % to 2,5 %.

Banks amicably rushed to borrow from the state. Naturally, the bankers were unobtrusively hinted that the received funds are best to lend to the construction companies and farmers who had very powerful lobbyists in the ruling Japanese political Liberal Democratic party. As a result, the construction sector got a fantastic boom. Read the rest of this entry »