Board-Ansicht
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Japan's bad-loan agency
Japan's bad-loan agency
Garbage in
Jun 20th 2002 | TOKYO
From The Economist print edition
The Irresolution Corporation
SOME pin their hopes on the Resolution and
Collection Corporation (RCC), the state's
loan-collection agency, to help change Japan's awful
banks, weighed down by ÂĄ150 trillion ($1.2 trillion) of
bad debts. The RCC is modelled on America's
Resolution Trust Corporation (RTC), which cleaned up
after the savings-and-loan mess in the late 1980s.
Sadly, Japan's version is no RTC. That body worked
efficiently to clear up problem loans. It had a limited
life, after which it was wound up. It brought the
problem under control fast, at a cost to the taxpayer
that was less than expected. Japan's RCC has fewer
resources and less authority in tackling a bad-loan
problem that dwarfs any in history.
If the Japanese government chose the right model, it
is running the RCC the wrong way, says James Fiorillo
of ING, a Dutch bank. The flaws run deep. The
RCC—created in 1999 and financed by
government-guaranteed bonds issued by its parent,
the Deposit Insurance Corporation—does not have a
limited life and is under no pressure to act quickly.
Though the government set a deadline of March 2004
for it to buy up bad loans, it has not set a date to
wind up the RCC. Disposals of bad loans could drag
on, at a cost to taxpayers.
With only 2,400 employees, compared with the 8,000
that the RTC had, the RCC also lacks resources. Most
of its staff come from the bust financial institutions
that generated the bulk of the bad loans in the first
place; many of the rest are former bureaucrats. Since
unemployment is rising among white-collar workers,
they have no incentive to finish the job and lose
theirs.
The RCC has few good assets with which to dilute the
bad. It took over some ÂĄ5 trillion of bad loans from
bankrupt mortgage companies and banks, and has
recovered about half of these. Yet unlike its American
counterpart, which took over all assets, good and
bad, of bust savings-and-loans, the RCC got only the
bad bits that new owners of bust banks did not want.
That makes it harder to group assets, by geography
or industry, into attractive packages for securitising
or selling in bulk.
Instead of fixing these flaws, politicians have
attacked the RCC for offering banks prices for
distressed debt that are supposedly below market
value. How else, they ask, could the RCC have spent
ÂĄ39 billion on bad loans recorded on banks' balance
sheets as worth over ¥1 trillion—a mere 3.9% of their
recorded value? This ignores how banks have
notoriously overvalued collateral, and how the RCC
took on many of the very worst assets, such as
buildings in which gangsters have squatters' rights.
The RCC has made little profit, if any, on these
assets. Besides, banks have always been free to take
rival bids for their loans from private institutions.
There is indeed no shortage of private companies
keen to buy bad loans from banks—at the right price.
Since 1999, when they were allowed to apply for
licences, some 60-odd firms, including foreign
investment banks such as Morgan Stanley and
Goldman Sachs, have competed with the RCC to buy
bad loans from banks.
Does Japan even need an RCC,
then? Not in its current form.
Still, one politician in the ruling
Liberal Democratic Party,
Yasuhisa Shiozaki, believes that
a reformed RCC could play a role
in restructuring banks and their equally wobbly
borrowers. It could, he says, buy blocks of debt in
rotten companies and then force needed changes on
the companies—even outsourcing debt workouts to
specialist foreign institutions. Banks, he says, should
be made to sell many more of their bad loans to the
RCC. If that means more losses for the RCC, then the
banks' shares could be transferred to the
government, in effect nationalising them.
Foreign bankers agree that the RCC might have a role
as a warehouse for bad loans. They say that it should
not attempt, as it is now doing, to restructure
companies itself, as this can take years (and
expertise that the RCC lacks) to complete.
No matter how the RCC might be reformed, it will be
unable to help solve the problem of Japan's bad loans
until the banks themselves are forced to act. Yet
they fear that selling or writing down more bad loans
would leave them badly under-capitalised or even
bust. Suggestions that the government should
sweeten the sales by buying loans at a premium
make little sense. That would be an indirect injection
of public funds—which the government has spent the
past two years denying the banks need anyway.
Quelle: Economist (nur Abo)
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