Liquidity Crisis in the Making – Japan's Role in Financial Instability

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Liquidity Crisis in the Making is part one of a two-part series. Part 1 sheds light on the Bank of Japan and its three-decade attempt at a soft landing following the bursting of massive asset bubbles.

In propping up Japan's economy and financial markets, its central bank indirectly provided liquidity to the world's financial markets. While the liquidity was well received by investors, certain events, as I discuss in part two, leave me concerned the BOJ could unleash a liquidity vacuum felt around the world.