This article summarizes the events around the October 19, 1987, Japanese stock market decline. Although Tokyo suffered a "crash," it did not experience the same "panic" as New York, primarily because Tokyo had a more consistent institutional and regulatory structure and could rely on more patient investors. Tokyo can, with certain limitations, be taken as an example of how the "Brady Report" proposals would work in practice. Since Tokyo suffered a crash, if the Brady proposals are designed to prevent a crash, the Japanese experience proves that this cannot be done. On the other hand, if the Brady proposals are not meant to prevent a crash, but rather to help a quick return to an "orderly market," Tokyo can serve as evidence that the Brady proposals are a step in the right direction.
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