Abstracts » Business, international

Urge to merge

Article Abstract:

The latest collapse of the Tokyo Stock Market has led to draft legislation to regulate financial markets. However, the same draft legislation leave an apparently intentional loophole for possible mergers between banks and securities firms. There are many small securities firms close to the danger-level 120% capital-adequacy ratio while there are banks whose capital-adequacy ratios are below the 8% mandated by worldwide banking rules. Banks are seeking access to corporate underwriting to improve their financial standings, and acquiring small ailing securities firms could be the answer.

Management, Economic policy, Securities industry, Financial markets, Japan. Diet

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Out of the loop

Article Abstract:

Banks worldwide are taking bigger risks by financing transactions off their balance sheets to counter declining usage as providers of direct financing to business. The increase in the securitization of corporate assets and the growing availability of money market funds and other such instruments as an alternative to bank deposits are the causes for this situation. These trends will bring more risks to the international financial system as they Europe's financial markets apparently continue to imitate the deregulating trends in New York, London and Tokyo.

Commercial banks, not elsewhere classified

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