In those countries, European banks outside the region have recently played important roles in the financial systems. However, amid the current crisis, those European banks’ lending to local firms declined rapidly and that partly accounted for the deterioration of economic activity in that region. Such situation is, to some degree, also relevant to Japan.
International banks have been the dominant liquidity provider to Japan’s real estate market for the last several years. However, since around autumn 2007, real estate business of those international banks rapidly shrank, which led to a decline in transactions in the real estate market.