Which bank failure is widely regarded as the trigger of Japan’s 1997 financial crisis?

Hokkaido Takushoku Bank’s failure is widely regarded as a trigger of Japan’s 1997 financial crisis.

The bank, founded in 1899, had been designated a city bank and had substantial exposure to Japan’s property and lending boom. After the asset-price bubble burst in the early 1990s, falling land values left many Japanese financial institutions with large nonperforming loans.

Hokkaido Takushoku Bank became unable to continue as an independent institution and was effectively closed in November 1997. Its failure damaged confidence in Japan’s banking system. Yamaichi Securities, one of the country’s major securities firms, also failed that month, deepening the shock.

The crisis was part of a wider Asian financial turmoil that began with Thailand’s baht crisis earlier in 1997. Japan’s problems were not simply a stock-market crash: they involved banks, property prices, corporate debt, weak demand, and prolonged deflationary pressure.