There were a number of specific weaknesses -- connected lending, government-directed loans, poor credit evaluation, lack of transparency, and inadequate prudential supervision.
The situation was sustainable if growth and capital flows were maintained, but was not sustainable in the harsh world in which we live, where confidence is fragile, capital flows are flighty, and the stabilising forces of the “fundamentals” are slow to assert themselves. BIS Review 113/1997  -2-  Why did it happen?