Reducing the value of banks shareholdings

Assignment Help Business Economics

Reference no: EM13995904

In the early 1990s, land prices plummeted in Japan, leading many bank borrowers to default on their loans. Stock prices also came down sharply, reducing the value of banks’ shareholdings. The net result was that most Japanese banks fell into severe financial trouble, with many large banks near bankruptcy. As a result of this crisis:

banks did not operate normally, thus borrowers found it unusually difficult to obtain credit—a situation known as a “credit crunch.”

the Japanese economy enjoyed many years of robust growth throughout the 1990s.

the virtual breakdown of the banking system created credit shortages that made it easier for smaller firms to make capital investments and, in some cases, to purchase raw materials and pay workers.

the yen gained in value and Japan's trade balance was in surplus as the country lost its importing power.

Reference no: EM13995904

Questions Cloud

How user friendly are the sites : For this discussion we will compare three websites with information about infancy and toddlerhood. After browsing the sites, compare and rate them in terms of usefulness to parents and daycare professionals. How user friendly are the sites

When the stock of money increases too rapidly : When the stock of money increases too rapidly, then the economy will likely experience. The money supply in the united states is backed by. Money that is backed by something tangible like gold

A money market mutual fund and federal reserve notes : A money market mutual fund ______. Federal Reserve Notes. Early in the US history, tobacco and cotton were used as forms of money know as "country pay". when used, these forms of currency:

Describe schizophrenia-anxiety disorders-eating disorders : Describe schizophrenia, anxiety disorders, eating disorders, and personality disorders and how these disorders may be manifested during adolescence. Why is it important for you to understand and be able to identify these disorders in your roles as a ..

Reducing the value of banks shareholdings : In the early 1990s, land prices plummeted in Japan, leading many bank borrowers to default on their loans. Stock prices also came down sharply, reducing the value of banks’ shareholdings. The net result was that most Japanese banks fell into severe f..

Stand between savers and investors serve important purpose : Financial intermediaries, such as banks, that “stand between” savers and investors serve an important purpose by: having a comparative advantage to evaluate the quality of borrowers at a much higher cost and with lesser outcomes than individual saver..

Customers perception of quality includes performance : Which schools of management thought are illustrated in this case? Customers’ perception of quality includes performance, reliability, durability, serviceability, and aesthetics. What else do car customers want? Add to the perception of quality and cr..

Draw a production possibilities curve for time : Draw a production possibilities curve for time. On one axis put sleep time and on the other put awake time. You have 24 hours available in a given day. Indicate the combination that describes your allocation today. Also indicate a combination that is..

Explain the purpose behind the AMT : Write a three- to four-page (12-point, double-spaced) memo to Alex Lee, explaining the following in terms that he will understand. Explain the purpose behind the AMT. Describe how and when the AMT is applicable.

User Account

All Pages