The Japanese banking system went through a cycle of ________ in the 1990s similar to the one that occurred in the U.S. in the 1980s.

Question

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The Japanese banking system experienced a cycle of regulatory forbearance in the 1990s, similar to what happened in the US in the 1980s. Regulatory forbearance refers to the practice of regulators temporarily relaxing their enforcement of certain regulations in order to avoid triggering bank failures or exacerbating a financial crisis. In the case of Japan, regulators turned a blind eye to risky lending practices and allowed banks to continue operating even though they were technically insolvent. This led to a decade-long economic stagnation known as the "Lost Decade".

The Japanese Banking System Went Through a Cycle of ________