Cash in on History

By Mary Kane 05/19/2008 09:48AM

One of the lessons from Japan's long economic crisis in the 1990s was supposed to be that ignoring bank losses and delaying any action to correct them only prolongs the pain. Japan spent almost a decade dealing with a deflated economy as it tried to recover from the bursting of its stock and property bubbles in late 1989. Banks hid losses and regulators looked the other way, which only added to the length of the slowdown. Japan's experience often is cited as an example of how not to handle a financial crisis.