The press has succeeded in deluding you. Why did you let them do that?
It was the internet, Oh Lord, made me do it!
Actually, that's not true. I should have noodled around the subject a bit before I posted anything. I'm intrigued such an apparently serious problem would take so long to resolve and a bit intimidated by a view along the lines of it's not like here because it's not here, etc. "Asymmetry?" (Ahem!)
This might be interesting in light of what's been posted here recently.
Jonathan Garbutt says the co-mingling of risk is a significant problem in a Japanese restructuring of a company. Assets held in trust are not protected from failure of the trustee and upon failure of trustee, courts would give use of those assets to failed trustee company for the usual reasons:
There is no way to put such flows of funds really 'in trust.' Even if they are put in
the Japanese form of a trust, if the trustee firm goes bust, the courts are far more interested in protecting the jobs of the
employees of the bankrupt firm than they are in protecting investors. Basically any attempt to take the 'entrusted' cashflows
away from the processing firm will not be allowed by the bankruptcy courts. Contract-be-darned, protecting the employees
and rebuilding the firm will always be the number one objective of the courts. So if the investors lose a few interest payments,
and these are used by the bankrupt firm to cover its own bills, well, sho ga nai, ne? (Japanese for 'tough luck')
And,
Japan was left with the worst
possible resolution to the problem because the legal system effectively left the policy makers very few options. The focus
had to be on saving the bank for the sake of the employees and their pensions. Japanese pensions are still not transferable
and most firms still do not have fully-funded pension structures, so if the firm collapses, the employees lose everything... but
that is another issue.
gaijininvestor.com
Garbutt seems to contradict himself a bit further on, writing of "the massive number of bankruptcies and retstructurings, " Even so, interesting.
I found at the Japanese Bankers Association website The Guideline for Multi-Creditor Out-of-Court Workouts, issued this Oct 18. It might be a way of allowing the vulture capitalists to land. There is no mention of a trustee - creditors' committee has the function, if I read it right.
zenginkyo.or.jp
With respect to the pension obligations it appears,according to the BoJ report of Profits and balance-sheet developments 1999, some banks are apparently making up their funding short falls. No mention was made in the summary report for 2000.
Also it appears some banks are liquidating their share crossholdings, although to what degree is not clear.
boj.or.jp |
