Donagh Morris

IJA members, as well as senior figures from public and private areas of the Irish financial sector attended the event which was held in the central location of the Ballsbridge Court Hotel.

Professor Fujii has a very distinguished background, having held a number of important positions at the Ministry of Finance between 1988 and 1999, including Director of the Office of Investment Management, Securities Bureau. In addition to her position at the University of Tokyo, Professor Fujii currently serves on numerous commissions and advisory groups within the Japanese Ministry of Finance and Ministry of Internal Affairs and Communications, and is also a Special Research Fellow at the Japanese government’s Financial Services Agency (FSA). (The Japanese FSA is the Japanese equivalent of the Irish Financial Regulator.)

In her lecture, Professor Fujii described the measures taken by the Japanese government to deal with the banking crisis which followed the collapse of Japan’s property bubble in the early 1990s, and the lessons that may be learned from the Japanese experience.

The audience heard that the duration of the Japanese crisis is considered to have run from 1991 to 2003 and that the cause of the crisis was the bursting of a bubble that had been created by a high concentration of banks' portfolios on loans extended to real estate, non-banks and construction industries. As part of its efforts to resolve the crisis, Japan created and utilised three asset management agencies, though these were designed as short-term agencies. After the end of the crisis in 2003, it was calculated that banks' losses totalled approximately 20% of GDP. Furthermore, it is estimated that 53% of public money was recovered in the end. Professor Fujii concluded that quick recognition of the severity of the crisis is essential. She also explained that asset purchasing alone may not be enough to end such crises, and that a legal framework resolution is critical to success.

In April 2009, Richard Katz, Editor in Chief of The Oriental Economist Alert, published an article in the journal Foreign Affairs (http://www.foreignaffairs.com) entitled "The Japan Fallacy" citing reasons why the 2008 U.S. financial crisis is not like Japan's "lost decade". It remains to be seen what will differ and what will be the same between the full consequences of the U.S. and Irish financial crises and Japan's slump in the 1990s, but we sincerely thank Professor Fujii for her comprehensive description of and insights into the Japanese experience which she conveyed in this timely lecture.