Japan's finance sector still in trouble

Ten years ago this month, Japan was beginning to face its worst postwar financial crisis starting with mid-tier brokerage Sanyo Securities Co filing for bankruptcy protection.

That led to the first default in the short-term credit market under which financial institutions lend and borrow day-to-day funds. This development paralyzed the market. Hokkaido Takushoku Bank and Yamaichi Securities Co soon went under.

There was more to come, however. In October 1998, the Long-Term Credit Bank of Japan collapsed, closely followed in December by Nippon Credit Bank. The government injected massive amounts in public funds to rescue the big banks.