Alan Greenspan’s Age Of Innocence

Alan Greenspan: Japan in recent years has had to struggle back from the stock-market and real estate crash of 1990. Japanese banks became heavily invested in loans backed by real estate as collateral, as real estate prices soared. When the turn came and prices cascaded downward, the collateral became inadequate. But instead of calling the loans, as most Western banks would do, the bankers refrained. It took years and many government bailouts before real estate prices stabilized and the banking system returned to normal lending, with realistic estimates of bad loans and, hence, capital.
I concluded from this that Japan behaved differently from other capitalistic countries.

Really? Sounds fairly familiar.

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