This paper clarifies the nature of the bank panic that occurred in 1927 Japan. The process of this panic occurred in two waves. Our hypothesis is that the first wave is of the AI type, that is, a typical panic caused by depreciation of bank assets and asymmetric information. On the other hand, the second is of the RW type, Diamond & Dybvig's self-fulfilling panic due to failure of maturity transformation. We accept this hypothesis by confirming qualitative differences in the trigger and the end of panic, exploring the cause of failed banks through examining historical documents, and identifying determinants of bank runs and closures in Tokyo using statistical analysis.
