Episode 395 – A Slice of the Pie, Part 2

This week: a combination of political scandals, tabloid journalism, institutional inertia, and of course the goddamn Swiss lead to the long, slow, death of LTCB.

Sources

Espig, Peter. “The Demise of a Banking Dinosaur: Long-Term Credit Bank.” Chazen Web Journal of International Business, 2003.

A Japan Times obituary for Takahashi Harunori upon his death in 2005.

Tett, Gillian. Saving the Sun: How Wall Street Mavericks Shook up Japan’s Financial World and Made Billions

Itoh, Masanao, Ryoji Koike, and Masato Shizume. “Bank of Japan’s Monetary Policy in the 1980s: A View Perceived from Archived and other Materials.” IMES Discussion Paper Series.

Images

The logo of the former LTCB, which finally went bankrupt in October, 1998.
Katsunobu Onogi (R), President of the Long-Term Credit Bank of Japan (LTCB). announces their tie-up agreement with the Swiss Bank Corp (SBC) during a news conference at a Tokyo hotel 15 July while SBC Warburg Chairman Johannes de Gier (L) listens. LTCB and SBC announced their tie-up, including the merger of their domestic securities operations. AFP PHOTO (Photo credit should read KAZUHIRO NOGI/AFP via Getty Images)
This image is from a local daily in Pennsylvania; I included it because it shows just how big a deal the failure of LTCB was.
Katsunobu Onogi, president of the troubled Long-Term Credit Bank (LTCB) arrives at the Bank of Japan to announce the company’s drastic reform plan saying it will write off 750 billion yen (5.3 billion dollars) in bad loans and top officials including president resign their post 21 August. AFP PHOTO (Photo credit should read YOSHIKAZU TSUNO/AFP via Getty Images)Japan

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