Monetary Policy and Investment Financing During Structural Change : The Japanese Financial Crisis of the 1990s

The expansionary policy of the Plaza Accord has only been the trigger for the 'bubble' and the following financial crisis of the 1990s. The causes of the crisis can rather be found in the transformation of the financial system from a system of investment financing by banking groups to one of competition between banks and the open capital markets in the 1980s. To show this, the article is organized as follows. Section 1 will sum up the development of the crisis. Section 2 reconsiders and evaluates the role of the monetary policy during the crisis. Section 3 will explain the structure and dynamics of the asset inflation/deflation. Section 4 will analyze this process due to financial transformation. Section 5 puts it all together.