In their research about financial crises, Carmen Reinhart and Ken Rogoff document that the six major historical episodes of banking crises in advanced economies since the 1970s were all associated with a housing bust.1 Plus, the drop in house prices in a bust is often bigger following credit-fueled housing booms, and recessions associated with housing busts are two to three times more severe than other recessions.2 And, perhaps most significantly, real estate was at the center of the most recent crisis.
12.4 trillion yen of public funds was injected into the banking system as capital. In the UK, in 1890, the bursting of an overseas investment bubble resulted in the Baring Crisis, and more recently, the Secondary Banking Crisis occurred during the 1970s after the collapse of a commercial real estate boom.