The conventional framework of the Japanese financial system has divided the industry by type of business, entrusted each type of business to specialized financial institutions, and prohibited institutions from entering into other types of business.
What had previously been viewed as a passing bout of “financial turbulence” was suddenly transformed into a full-blown panic. The U.S. economy, which was at the epicentre of the crisis, suffered its most severe downturn since the Great Depression. It could have been much worse.