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To: Sam Citron who wrote (8497)	11/18/1997 7:57:00 PM
From: Snowshoe	Respond to of 18056

>>Hokkaido Bank is not a top 20 bank.<< (edited) Can you verify this? According to Reuters it was the 10th-largest Japanese bank. Note, there are two banks involved here with similar names... Bad Loans Sink Japan's 10th-Largest Bank yahoo.com excerpts... TOKYO (Reuters) - Japan's 10th-largest bank Hokkaido Takushoku Bank said Monday it was going out of business because of a bad loans crisis, ironically setting off a major stock market rally. The troubled bank, with assets of 9.5 trillion yen ($75.7 billion), had in September postponed its planned merger with crosstown rival Hokkaido Bank Ltd. because of the former's massive problem loans. Hokkaido Takushoku's loans, at 934.7 billion yen ($7.5 billion), are more than 13 percent of its total loans outstanding. Japan's financial authorities, determined not to let one of the country's 20 big banks fail, had pressured the two banks to tie the knot so that Hokkaido Takushoku could cope with its loan woes. But the weight of bad loans and Japan's declining economy in recent months, especially in mostly rural Hokkaido, in the end spelled doom for the bank's survival.

To: Sam Citron who wrote (8497)	11/18/1997 8:06:00 PM
From: Rational	Read Replies (2) \| Respond to of 18056

Sam: I have stressed that IMO the market liked public fund infusion into the big ailing banks. The Hokkaido bank's failure and how it was handled was incidental and coincidental, IMO, to the Japanese market's response. If you read today's wire posted here, the PM's unacceptance of the public fund infusion is being interpreted as a negative factor for the Japanese market tomorrow. In any case, protecting for instance, convertible subordinated debt of a bank like Hokkaido instils a lot of confidence in investors to make such deposits in other banks. Such convertibles are accounted for Tier-II capital of a bank. Thus, how Hokkaido's failure was handled conveyed some information, but nothing NEW because the market always expected that the government would do at least this for big banks (this has been a practice for ALL big banks in the US). Sankar