Parliament approves series of bills to mop up banks

Article Abstract:

Several bank-related bills have been passed in Japan's parliament, paving the way for a package that involves 60 trillion yen in public money to resolve problems in the banking industry. A large portion of the funds is intended to make up for the lending to the inflated real estate sector in Japan, but lawmakers will still have to create means of funneling funds to banks, which need the money but are not ready to admit their financial weakness. Banks that avail of government money are likely to be punished by the market at a sign of trouble, causing an increase in financial costs and a battered stock. Japan's top 18 banks state that they have capital equal to 8% or more of their loans, but analyst Robert Zielinski says that the top nine money-centers lack around 4.1 trillion yen to meet the 8%.

Comment:

Japan: Several bank-related bills have been passed in parliament, paving the way for package to resolve problems in sector

Government regulation (cont)

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Tokyo unveils comprehensive five-year bank bailout plan

Article Abstract:

The banking industry in Japan will be subjected to a comprehensive five-year plan formulated by the government as an effort to resolve difficulties in the industry. The plan calls for an establishment of a bridge bank to take over banks that are thought to be too weak to survive. Those banks will be taken over by government administrators, continuing to provide loans to borrowers. The banks' loans would be classified into good and bad loans, with the bad loans shifted to a collection agency, while the good loans will be transferred to a holding company.

Comment:

Japan: Banking industry will be subjected to comprehensive 5-year plan to resolve difficulties in the industry

Strategy & planning

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