The Great Japanese Bank Vanishing Act 1080p caption

Added: 2026-05-25

[00:00:00]The world's top five banks once vanished. Around 1990, Japanese banks ruled global finance, top five by assets, all Japanese. In 1988, the Basel Accord demanded 8% capital against risk-weighted assets. Deadline, end of 1992. Miss 8% and you lose international banking rights. Foreign banks stop trusting you. From 1986 to 1989, Japanese banks grew loans at double-digit rates, most of it backed by real estate. Basel I let banks count just 45% of unrealized stock gains as capital, a ticking time bomb. In the early 1990s, stocks and land crashed.

[00:00:38]Capital ratios collapsed with them.

[00:00:40]Basel I took full effect by end of 1992.

[00:00:43]For Japan, fiscal year end March 1993.

[00:00:46]>> [music] >> Survive or die. To defend the 8% line, banks dumped falling stocks and land into the market. Selling pushed prices lower. Lower prices crushed capital ratios again. Repeat. Desperate banks yanked loans back from companies. No mercy, no renewals. Cash lines cut, Japanese firms fell one by one, a corporate massacre. Dead companies meant bad loans. Bad loans killed the banks back. Hokkaido Takushoku, LTCB, Nippon Credit, [music] the giants failed or were forced to merge. One global rule didn't cause the bubble, >> [music] >> but it triggered the collapse, a perfect amplifier. This credit crunch pushed Japan into the lost decades. Did you know this? Subscribe and drop a comment.

[00:01:27]Thanks.