Nikkei 225 · October 7, 1998
The bank nationalisation law
+6.17%
single-day change vs previous close
Part of a longer stretch
When the banks themselves failed
near the end of it · 1996-06-26 → 1998-10-09, -43.18% over the whole period
What happened that day?
- On 7 October 1998 the Nikkei 225 rose 6.17% in a single day
- Eight years after the bubble, bad loans had piled up without ever being cleaned out
- That day Japan's parliament passed a law allowing insolvent banks to be nationalised or wound up
- Until then there was no legal basis for dealing with a failing bank at all, so nobody could act
- Once a method existed, the scenario of the financial system collapsing cleared
- It was only a beginning, though. Actually working through the bad loans took several more years
Sources
Every figure on this page is recomputed from the original daily closing prices and checked against them at build time. The account of what happened is written from the sources listed above.