-->Thursday, September 26, 2002
Shiokawa Pushes Idea Of Injecting Public Funds Into Banks

TOKYO (Nikkei)--Finance Minister Masajuro Shiokawa attracted the interest of the banking community and other business circles Wednesday when he said that banks should receive public funds if the situation warrants it.

When he commented on the situation, he meant banks that turn undercapitalized as a result of sending troubled corporate borrowers into bankruptcy or helping them rehabilitate by waiving loans.

"I want banks to push ahead with getting rid of (ailing) companies. As a result, public funds can be injected (into banks) if necessary," Shiokawa told the press.

Shiokawa stressed that banks should draw a sharp line between companies with the potential to grow or increase earnings and those with no such prospects."I ask banks to distinguish between companies that should be kept alive from those that should not," he said.

If banks adhere to the implications of Shiokawa's comments, they can choose one of two methods: force troubled borrowers to embark on drastic restructuring or merge with other firms, and then waive their loans; or terminate financial assistance altogether, sending them into bankruptcy.

As for banks' financial standing, Shiokawa said it is believed that banks will become undercapitalized if the bolstering effect from deferred tax accounting is excluded.

If banks become undercapitalized as a result of their efforts to help or eliminate ailing borrowers, the government should inject public funds into such lenders without hesitation, Shiokawa contended.

The finance minister also indicated that top bank management should not necessarily be held responsible for mismanagement, even when they receive public funds."Their responsibility is to strengthen the financial standing" of corporate borrowers, he said.

Shiokawa's comments Wednesday put him in the same camp as Masaru Hayami, governor of the Bank of Japan, and Heizo Takenaka, state minister in charge of economic and fiscal policy, who have been saying that public fund injections are necessary to accelerate the disposal of nonperforming loans.

Their opinions are squarely at odds with Hakuo Yanagisawa, state minister for the Financial Services Agency, who has been insisting that the nation's banking system is not in a crisis stage, which is necessary to inject taxpayer money into troubled banks.

"But now Yanagisawa is being squeezed into a corner," according to some political insiders.

As for regional financial institutions that are slow to realign themselves, Shiokawa said these lenders are"one of the reasons behind Japan's weak financial system."

Regional financial institutions"need to bolster their financial strength by merging with one another. And I favor infusing public funds (to encourage) them to do so," Shiokawa said.

(The Nihon Keizai Shimbun Thursday morning edition)

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Die FSA (staatlich) schätzt die Uneinbringlichkeiten auf (umgerechnet) 363 Mrd. €, was immerhin schon nicht nichts ist. Sondern 8 % des GDP.

Die BoJ (staatlich) hält nichts davon und handelt bereits auf eigene Faust (Aktienkäufe, wie bekannt). Nonperformers kann sie ja wohl nicht gut kaufen, auch wenn die Parallele zu Deutschland ab 1931 möglich wtre, wo die Reichsbank auch geplatzte Wechsel im Portefeuille und die entsprechenden Noten"draußen" beließ.

Andere in Japan (private) verdoppeln oder verdreifachen die FSA-Zahlen. Am weitesten greift David Atkinson von Goldnman, Sachs. Der nimmt 237.000 Mrd Yen an - was in etwa der Hälfte des jap. GDP entspricht (ca. 1,85 Bio. €).

Als Non Performing Loans, bittschön!

Echt spannend. Vielleicht kriegen die es sogar hin, alle loans als Nonperformer zu schustern. Das wär dann wirklich Klasse.

Gruß!

-->Non performing loans lt. FSA (staatlich): 363 Mrd €. 8 % GDP.

BoJ bezweifelt dies und kauft deshalb Aktien, wie bekannt, Nonperformer kann sie auch kaum kaufen (es sei allerdings an die geplatzten Wechsel erinnert, die 1931 ff. im Portefeuille der Reichsbank blieben und die entsprechenden Noten"draußen").

Private sehen die FSA-Zahlen als viel zu klein. Am höchsten greift Mr. David Atkinson von Goldman Sachs, der (umgerechnet) ca. 1,85 Bio € als non performing einstuft.

Immerhin die Hälfte des GDP (wieder umgerechnet). Das hat doch was.

Gruß!