mar 14, 1927 - Japanese financial crisis

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The Shōwa Financial Crisis occurred after the post–World War I business boom in Japan. Many companies invested heavily in increased production capacity in what proved to be an economic bubble. The post-1920 economic slowdown and the Great Kantō earthquake of 1923 caused an economic depression, which led to the failures of many businesses. The government intervened through the Bank of Japan by issuing discounted "earthquake bonds" to overextended banks. In January 1927, when the government proposed to redeem these bonds, rumor spread that the banks holding these bonds would go bankrupt. In the ensuing bank run, 37 banks throughout Japan (including the Bank of Taiwan), and the second-tier zaibatsu Suzuki Shoten, went under. Prime Minister Wakatsuki attempted to have an emergency decree issued to allow the Bank of Japan to extend emergency loans to save these banks, but his request was denied by the Privy Council and he was forced to resign.

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