Bank of Japan Gov. Masaru Hayami on Monday pledged the central bank would take action in the event Japan was threatened with another financial-system crisis.

"If an unexpected incident breaks out, we will counteract it by conducting sufficient preparations," Hayami said at a session of the House of Representatives Budget Committee.

In November 1997, the nation's banking system took a blow from a string of institutional failures, including that of Hokkaido Takushoku Bank. In 1998, the bad loan-swamped Long-Term Credit Bank of Japan and Nippon Credit Bank were nationalized to keep their outright failures from destabilizing the banking system.