Stock and bond prices tumbled and investors rushed to pull out of money-market funds that were heavily overweight in bonds issued by credit card companies. While the 1997 crisis had been brought about by the inability of financial institutions to manage corporate sector risk adequately, the primary reason for the credit card crisis was a failure of their household-sector risk management.
The instability was compounded by their herd behaviour in expanding their share of the household credit market. In fact, these two financial disturbances were overcome within a fairly short space of time thanks to the bold and decisive restructuring of financial institutions and companies, and the supply of liquidity by the central bank to deal with the credit crunch.