Economics

" The financial system in Japan is in need of a complete overhaul." Discuss.


What we are looking at here is the Japanese banking crisis that has been in chaos for so long. We will look at what started it, the implications that have risen over the years and what must the Japanese do in order for it to get its financial system back on track.

The 'Asian miracle' itself was the product of falling profit rates which began to emerge in the major capitalist economies from the mid-1970's onwards as firms in the United States, Europe and above all Japan directed capital into the region in the search for cheaper labour and resources. For a time investment in Asia did provide a boost to profits, so much so that for the first half of the 1990's economic expansion in the region accounted for half the increase in world economic output. But by 1995, the Asian boom was starting to falter. Overcapacity was developing in industries such as cars and computer chips, while the growth of exports...