ABSTRACT
This chapter highlights the accuracy of Strange's view about the endurance of United States (US) hegemony in global finance in light of developments during the 1990s. Throughout the 1980s, many US scholars argued that Japan was severely eroding US power in global finance as it emerged as the world's largest creditor and the size of its financial institutions and markets quickly surpassed that of their American counterparts. Throughout the 1980s, many US scholars argued that American financial power was rapidly eroding in the face of a challenge from Japan. One reason for this view was the enormous outflow from Japan of long-term capital at that time. Each year during the late 1980s, Japan was exporting close to $100 billion in long-term capital. The bursting of this financial bubble had several important implications for Japan's international financial influence. The bubble's collapse also revealed important weaknesses in the international competitiveness of Japan's financial markets, a point Strange had been highlighting.
