Japan's bad-loan system may simply be too big

Article Abstract:

Hakuo Yanagisawa, the head of Japan's banking-system regulator, the Financial Services Agency, has disclosed that the level of bad loans at Japanese banks may not drop for three years and that a drop of 50% may take seven years. Japan's banking problems appear just too big, as indicated by Yanagisawa's statement. The impact of the country's fiscal problems is discussed in the context of the fighting between the Bank of Japan and the politicians and bureaucrats, the banking systems, and the recent market crisis.

Liabilities NEC, Political aspects, Yanagisawa, Hakuo

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Analysts blast Japanese bailout plan as long on rhetoric, short on specific

Article Abstract:

The Japanese Finance Ministry announced its plans to address the prevailing banking crisis. The bailout program includes forcing weak banks to bankrupt and using the increasing insurance pool to pay off customers of failed banks. Many analysts criticized the plan for its apparent lack of substance. They noted that failed to indicate where the government will get the funds needed to finance the bailout. Moreover, it failed to outline incentives for banks to write-off bad loans.

Economic Programs, Administration of Economic Programs, Analysis, Japan. Ministry of Finance

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... But state capitalism is emerging

Article Abstract:

The consolidations taking place in Japan's banking industry are not a response to the globalization taking place with other banking systems of the world but an integration to the state's financial system. For instance, the government-initiated merger of the Bank of Japan, Dai-Ichi Kangyo, and Fuji Bank created a colossal merger. However such merger was financially weak because of the three banks' poor financial condition. As such, the move has been perceived as a form of state capitalism because of the central allocation of capital and the state's role in directing the economy.

Acquisitions & mergers, Banking Institutions, Depository Credit Intermediation, Mergers, acquisitions and divestments, Banks (Finance), Dai-Ichi Kangyo Bank Ltd. (Japan), Fuji Bank Ltd.

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