Japan's mistake of liquidity vs. solvency being repeated: Baker
(NEWSER) - Japan’s economic troubles in the 1990s—the so-called “lost decade”—provides a cautionary tale for America’s current problems, writes James Baker, a Reagan Treasury Secretary, in the Financial Times. Japan used piecemeal bailouts and implicit guarantees to insolvent banks rather than swift action. So the “zombie” banks limped along somewhere between solvency and insolvency, too fragile to support the growth Japan needed. More»
