Finance: US and Japan Only Similar in Symptoms
Takatoshi Ito, University of Tokyo | May 13, 2008
The current problems of the US financial sector are often compared to those of Japan in the 1990s. ++ While there are many similarities, there are significant structural differences that suggest that a different remedy is required in the case of the US economy. ++ US banks, under greater pressure from the market, were quicker to acknowledge their losses and raise private-sector capital. ++ A massive injection of public funds into the banking system, in order to stabilize financial markets, will most likely not be necessary.
