Japan Financial Crisis Case Study

Words: 2089

Pages: 9

Open Document

a) U.S sub-prime financial crisis on Japan
Impact on Capital Markets
Due to the eruption of the sub-prime financial crisis, Japanese banks were greatly affected by the capital losses from their equity shareholdings in the Capital Markets as stock prices declined sharply. Japanese banks tried reducing the amount of cross-holdings of shares on banks' balance sheets; however, they were still exposed to the volatility caused by equity shareholdings.
On December 2008, the Japanese government passed a law which allowed capital injections. On March 2009, three regional banks obtained capital by applying to the authorities.
In the summer of 2007, Japanese stock prices had hit a recent peak; however, it began a gradual but substantial decline through the fall of 2008 due …show more content…
The 2008 financial crisis allowed the Japanese financial institutions to seize an opportunity to shine, this is evident where Mitsubishi UFJ Financial Group Inc, Japan’s biggest bank, decided buying a a 20% stake in Morgan Stanley, which was desperately in need of cash at that time. Nomura Holdings Inc., Japan’s biggest brokerage had an even bigger ambition. It took over Lehman’s operations in Asia and Europe, in an attempt to join the group of top global investment banks.

The profits of banking were greatly affected by these capital losses and due to the worsening credit quality of bank borrowers. This is shown by megabanks such as Sumitomo Mitsui, Mizuho, and Mitsubishi UFJ, whom in their financial year of 2008, ending March 2009; showed net losses in their financial statements on a combined group basis. Their Nonperforming loan ratios remained below 2% and their Capital to Risk (Weighted) Assets ratio exceeding 10%, however there could be a serious possibility where they could deal with a shortage of

Financial Modelling Essay example

The subprime mortgage crisis that happened in the United Stats since the end of 2007 queried the ability and the methods of the more efficient risk management. The traditional risk management that using variance to measure risk has been unable to play a part in present capital market. In other words, basing on a risk management sentiment, the occurrence of crisis required new approaches capable of precisely evaluating the systematic risk under the background that the crisis accelerated volatility…

Words 2744 - Pages 11

4201 Assignment 2 Essay

Model As Presented in ‘Chapter 2 -- The Anatomy of a Typical Crisis’ in Manias, Panics and Crashes - A History of Financial Crises The term “Financial Crisis” is a situation in which the value of financial institutions or assets drops rapidly. Such a crisis is met with panic in which investors may sell off assets or withdraw from savings accounts with the expectation that the value of those assets will drop if they remain at a financial institution. Hyman Minsky is an American economist who attempted…

Words 1099 - Pages 5

Retailing and Uniqlo Essay

widely popularize by UNIQLO is accepted by consumers. UNIQLO brought the warehouse-type marketplace to japan, Implemented SPA strategy, supposes clothes which are suitable for all populations on sundry occasions. UNIQLO set up factory in China which is the largest textile and garment producer in the world, the cheap labour power further reduced production costs. UNIQLO has lived through two financial crises and breakthrough in difficulty, acquired other brands and opened new stores, expanded new market…

Words 4904 - Pages 20

Louis Vuitton in Japan Essay

Louis Vuitton in Japan Case Study Student’s Name Instructor’s Name Course Title Date What has made LV’s business model successful in the Japanese Luxury Market? Japanese luxury market has often placed the greater deal about value on quality along with exclusivity of the products that are being offered as well as it is the critical success factor for the luxury brands within Japan. Fact, which Louis Vuitton has regularly concentrated on enhancing the quality of their product portfolio, has been…

Words 1203 - Pages 5

The Change Of American Automobile Industry

The change of American automobile industry Bing Bai St. Thomas University Feb 20, 2013 Author Note Bing Bai, Department of Business, St. Thomas University This research was supported in part by a grant from the BUS 673 management writing & reporting class. Correspondence concerning this article should be addressed to Bing Bai, Department of Business, St. Thomas University, 16401 NW 37th Avenue…

Words 4515 - Pages 19

Abstract: Corporate Governance and Oxford University Press Essay

Question: Discuss the different methods of corporate governance of several countries Study Skills Project Peter Sin Student ID: B4000749 Table of Contents Abstract pg.3 Introduction pg.3-5 Literature Review pg.5 Hypothesis pg.5 Methodology pg.5-6 Results pg.6-9 Discussion pg.10-14 Conclusion pg.14 Reference pg.15-16 Bibliography…

Words 3628 - Pages 15

Housing Bubble Essay

Bubbles in American’ Housing Crisis A case of Government failure What is housing bubble? Chardes Kindleberger (1987) define a bubble this way: a sharp rise of price of an asset or a range of assets in a continuous process with the initial rise generating expectations, of further rise and attracting new buyer. Generally speculators are interested in profit from trading rather than in use or earning capacity. The rise is then followed by a severe of financial crisis – in short bubble burst. There…

Words 1594 - Pages 7

Essay on Japan Yen

Yen Lawrence Cifarelli III, Nazanin Ershad, Natthima Sonsoem, Anyesha Mahaptra University of New Haven Abstract This Case study provides an insight to the fluctuations experienced in the currency of Japan, Yen from the late 1990’s to recent years. Japan follows the floating currency monetary policy due to which there is no measures taken on to control the fluctuations. Japan experienced magnificent growth through the 60's, 70's, and 80's leading into the 90's beginning. In the late 1990's, Japan’s…

Words 4337 - Pages 18

Economics and Financial Markets Essays

Global Financial Crisis of 2008-09: Triggers, Trails, Travails, and Treatments † Ganti Subrahmanyam * The present world economy has, increasingly, been interconnected in terms of small units such as industries, regions and national economies as discontinuous systems. Changes in these systems have varied impact across the world economies. This paper tries to trace out various triggers, trails and travails of the present crisis, with a view to suggest solutions or treatments for the global financial…

Words 8163 - Pages 33

International Financial Management Essay

Islamic Economic Studies Vol. 9, No. 2, March 2002 THE 1997-98 FINANCIAL CRISIS IN MALAYSIA: CAUSES, RESPONSE, AND RESULTS† ZUBAIR HASAN∗ This paper argues that the 1997-98 financial crisis did not hit Malaysia because the economic fundamentals of the country were weak. It was the result of massive unpredictable flight of short-term portfolio investment from the region including Malaysia. The paper assembles evidence, and employs econometric tools to support the contention. It maintains that…

Words 6183 - Pages 25