Japan’s successive financial-institution crises

Conditions at the time

Financial-sector vulnerabilities emerged amid a weak economic recovery.

How events unfolded

In 1997/11, crises at Sanyo Securities, Hokkaido Takushoku Bank and Yamaichi Securities overlapped.

Stakeholders and impacts

Financial institutions, customers, the Bank of Japan, households and businesses responded to the shock.

Information available at the time

A 1998 Bank of Japan survey reflected concerns that institutional failures could affect employment and income.

Findings confirmed later

Research analyzed how financial instability and weakening consumption and investment affected one another.

Alternative interpretations and limitations

Consumption-tax changes and the Asian crisis also overlapped, so the entire recession is not attributed solely to institutional failures.

Interpretation using later sources

A 2000 paper by BOJ researchers examines rising money growth alongside weak consumption and investment during financial anxiety. Risk premiums and financing conditions improved as anxiety eased in 1999. The governor's later retrospective also connects the financial crisis with prolonged deflation. ASSETCASTING interpretation: Central-bank liquidity and bank credit transmission are different indicators. Assess lenders' capacity and household anxiety alongside money supplied, rather than inferring real effects from liquidity alone.

Evidence coverage through 2019-07-22 · Sources checked 2026-10-14

• Understanding Japan's Financial and Economic Developments Since Autumn 1997 ↗
• Overcoming Deflation: Japan's Experience and Challenges Ahead ↗

Related events and periods1

• Global economic integration, IT investment, and recurring financial crises →

  An event or period whose recorded start falls within this editorial interval. This does not establish that it caused or represents the characteristics of the era, nor guarantee that the entire period falls within the interval.