Yamaichi's announcement was not a surprise. The firm has always been the weak sister of Japan's main securities houses. It needed a bail-out in the 1970s, when Japan was reeling under the Opec-induced oil crisis. There have been rumours recently that its London office would be closed.
Nor is the news necessarily awful. It is the absence of news from Tokyo that has worried the markets most. Now, at last, there is movement. Last week the government allowed Hokkaido Takushoku bank to fail after maintaining for 30 years that the country's top 20 banks were too big to be allowed to fail. Yamaichi's collapse - the biggest Japanese business failure since the Second World War - could be another step in the long overdue weeding out of Japan's bloated financial sector.
But this is exactly the kind of argument that officials have been making all along. Each time officials pour water on one room of the Asian financial crisis, flames break out in another room. The best hope now is for a public statement at today's annual Apec summit in Vancouver that persuades markets that concerted action is at hand.
First, Japanese prime minister Ryutaro Hashimoto must show he has unified his Liberal Democratic Party behind a plan to shore up Japan's banks. Second, Bill Clinton must show that he has persuaded the US Congress to stop starving the IMF of funds.
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