In the early 1990s banking crises occurred in Finland, Sweden, and Japan because:
A)of real estate bubbles in each country.
B)the central banks of these countries were prohibited from conducting monetary policy.
C)the value of the euro fell to historically low levels.
D)there were many runs on banks.

Question

Quizplus · Accepted Answer

The banking crises in Finland, Sweden, and Japan in the early 1990s were caused by real estate bubbles in each country. In Finland and Sweden, these bubbles burst after a period of rapid expansion in the late 1980s, leading to a wave of bankruptcies and loan defaults. In Japan, a similar real estate bubble had been building for several years before it finally burst in the early 1990s, leading to a prolonged period of economic stagnation known as the "Lost Decade."

In the Early 1990s Banking Crises Occurred in Finland, Sweden