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Strategies & Market Trends : World Outlook -- Ignore unavailable to you. Want to Upgrade?

To: Les H who wrote (790)	8/17/2001 2:10:20 AM
From: Don Green	Respond to of 48976

Liquidate Deadbeat Borrowers, Says Sakakibara Friday, August 17, 2001 TOKYO (Nikkei)--The Nihon Keizai Shimbun recently spoke with former Finance Ministry official Eisuke Sakakibara about what needs to be done to strengthen Japan's banking sector, which continues to be weak. Following are some excerpts from the interview. Q: The stock market still doesn't seem to like banks. A: There are problems with the banks themselves and there are problems surrounding banks, namely with borrowers and the government. Although the banks' reforms have been lukewarm, the issues go far beyond the banks alone. Q: What are the problems with the banks themselves? A: Restructuring is halfhearted at best. The recent mergers have actually meant that some banks are paying higher salaries. If they want to avoid layoffs, they must at least cut the average salary. But they also have to reward talent. Unless the banks work out what to do, they will never be competitive. They need to take radical action and stop worrying about harmony. Q: So they should struggle for power in a positive sense? A: Yes. Japan's current financial reorganization is not a reorganization at all. It is somewhere between a tie-up and a reorganization. Q: What needs to be done for Japan to once again be a major player in world finance? A: Internationalization of management is essential. Many U.S. banks invite foreigners to join their management teams to become more competitive, but major Japanese banks don't even allow foreign directors. Japanese banks should be at the point where board of directors meetings are in English. If the four major banking groups don't change, they might have an edge in the domestic market, but they'll never be major players internationally. Q: Many major banks seem to be emphasizing their domestic base. A: It is meaningless if they don't simultaneously bolster their overseas operations. Japanese manufacturers are going international and foreign capital is entering the Japanese market. To do business here, management must be international. Inward-looking domestic alliances will result in a loss of competitiveness. I don't sympathize with the banks, but there are other issues. For example, financial revival will never occur unless deadbeat borrowers are liquidated. The Japanese government hasn't touched this issue, so it is in effect preserving inefficiency. Japan is behind other Asian nations, like South Korea, which have liquidated borrowers while bailing out lenders. Q: How can the government start to liquidate borrowers? A: It needs to achieve fundamental deregulation and put an end to subsidies. In the retail industry, regulation is actually increasing in some cases, making it hard to tell banks to pull the plug on their borrowers. And the banks themselves need to be a bit more hardhearted. Q: Is there any way to improve the banking sector's weak profit structure? A: There are too many restrictions blocking their entry into other businesses. Unless such barriers are lifted, banks will find it hard to change their profit structure. (The Nikkei Financial Daily Friday edition)

To: Les H who wrote (790)	8/27/2001 8:27:35 PM
From: Don Green	Respond to of 48976

July Jobless Rate Hits Record High Tuesday, August 28, 2001 TOKYO (Dow Jones)--Japan's jobless rate hit a record high of 5.0% in July, showing the sharp economic slowdown has walloped the job market and suggesting that consumer spending could get hit hard in months ahead. Statistics: Employment The number of people employed plunged by 370,000 in July - for a cumulative decline of 1.17 million over the past four months - underscoring the rapid deterioration in the job market, according to data released Tuesday by the Ministry of Public Management. The number of jobless jumped by 230,000 from a year earlier to 3.3 million in July, the fourth straight month of increase. The dismal figures, which triggered a selloff in the stock market last week when they were leaked to local media, are certain to put the government under intense pressure to take measures to stabilize the job market and shore up consumer confidence. The government is expected to put together an economic package, financed by a supplementary budget of around Y2 trillion this autumn to help stem the deterioration. But with conditions worsening at such a fast pace and structural reforms in the pipeline likely lead to more corporate bankruptcies, Prime Minister Junichiro Koizumi could be forced to heed calls by some in the government for a larger stimulus package. The worsening labor market took a toll on both female and male workers. The jobless rate for males touched 5.2% in July, a record high and up 0.1 percentage point from a month earlier. The jobless rate for females hit 4.7%, also up 0.1 point. Further underscoring worsening conditions, the number of workers leaving their jobs voluntarily increased for the fourth straight month, rising by 150,000 on year, as more workers to opted to take voluntary retirement plans or leave because of uncertainty over their company's future, a ministry official said. The data revealed that manufacturers continued to shed workers at a furious pace as they slashed production in response to the steep drop in exports. The number of people employed in the manufacturing sector plunged 580,000 from a year earlier, the third straight month of decline. The embattled construction industry continued to shed workers for the eighth straight month, with people employed in that sector dropping 3.2% on year, as public works projects have dwindled and housing starts have tapered off. The service industry continued to expand hires for the 17th straight month, increasing employment by 1.0%, but the tempo slackened from last month's 1.9% rise. Underscoring corporate preferences for cheaper labor and restructuring pressures, which continue to put downward pressure on incomes, the number of part-time workers rose 4.2%, extending a rising streak started in September 1996. Highlighting the slackening demand for labor, the ratio of job offers to job seekers worsened to 0.60 in July from 0.61 a month earlier, according to a separate survey released by the Ministry of Health, Labor and Welfare. The ratio of new job offers to new job seekers fell sharply to 1.04 from 1.07 a month earlier. New job offers in the manufacturing sector plummeted 18.6% from a year earlier while those for the construction industry sank 0.1%. New job offers increased in the services sector rose 12.1% while those in the wholesale and retail sectors increased a combined 9.1%, showing resilience in the face of deterioration elsewhere in the economy.