| Abstract: | The processes that Japan used to solve its nonperforming loan (NPL) crisis of the early 1990s and the lessons learned could be useful in addressing the current global financial turmoil. Japan's NPL problem, which surfaced after the economic bubble burst in 1992, took 12 years to solve. The process was prolonged mainly due to the following: The government failed to comprehend the gravity of the problem at the initial stage, and, as a result, failed to take prompt and drastic action, such as the injection of public funds. The government's actions were small and incremental, and did not function effectively. The prolonged economic slump created new NPLs. The absence of drastic policies was attributable to the government's insufficient financial flexibility
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| Brief Excerpt: | RESEARCH Ratings Definitions Japan's Lost Decade Offers Lessons For Current Global Turmoil Publication date: 07-Dec-2008 Primary Credit Analyst: Naoko Nemoto, Tokyo (81) 3-4550-8720; naoko_nemoto@standardandpoors.com The processes...
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| Report Type: | Commentary
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| Sector: | Asset-Backed Commercial Paper, Asset-Backed Securities, Collateralized Debt Obligations, Commercial MBS, Corporations, Financial Institutions, Global Issuers, International Public Finance, Public Finance, Residential MBS, Sovereigns, Structured Finance, Utilities
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