Jim, getting back to our conversation about Japan and Asia, in support of my position, here's a brief article from today's NY Times:
July 24, 1999
Report: Japanese Bankers Hid Losses
Filed at 7:27 p.m. EDT
By The Associated Press
TOKYO (AP) -- Former executives of a failed Japanese bank said they hid huge losses to try to make it look like a government bailout was working, Kyodo News agency reported Saturday.
Six Nippon Credit Bank Ltd. executives, including the former chairmen and president, were arrested Friday on suspicion of covering up more than $830 million in bad loans.
The executives claimed they concealed the problem to avoid having to report that the bank had lost money for a third straight year, Kyodo said, citing unidentified sources close to the investigation.
The executives said another year of massive losses would have shown that a plan by the Ministry of Finance to make the bank healthy had failed, Kyodo reported.
Two years ago, the ministry pressed other financial institutions to pitch in $2.1 billion in emergency loans and gave $500 million in taxpayers' money in an effort to keep the bank afloat.
Phones rang unanswered at the bank and at prosecutors' offices late Saturday.
State-run broadcaster NHK said Friday the investigation could spread to the Finance Ministry, which allegedly knew the bank was not disclosing the full extent of its problems but took no steps out of fear of provoking a collapse.
The arrests at NCB came a month after prosecutors arrested three former top executives of another failed lender, the Long-Term Credit Bank of Japan Ltd.
Both banks were taken over by the government last year after regulators determined they were insolvent.
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