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To: Rosemary who wrote (22596)	11/23/1997 8:21:00 PM
From: ct	Respond to of 176387

It is tomorrow morning there and following is the first announcement. There will be a conference later. New Asia Setback on Eve of APEC Summit ------------------------------------------------------------------------ Sunday November 23 5:56 PM EST Yamaichi Board Decides to Close Brokerage By Brian Williams TOKYO (Reuters) - Yamaichi Securities Co. Ltd, Japan's oldest brokerage, will shut down, a spokesman said Monday, resulting in the country's biggest financial failure since World War Two. Financial sources said a last-ditch review at a meeting of Yamaichi's board of directors determined it had no chance of surviving a credit crunch, shrinking business and high-profile scandals. The board was to hold a news conference later Monday morning, the spokesman said. Japanese markets were shut on Monday for a national holiday, but international stock markets and the yen were expected to be hit by the news of the shutdown amid fears of a domino effect across Japan, Asia and possibly beyond. International markets were braced for fallout from Asia's latest economic crisis, the final chapter in a saga of Japanese corporate racketeering that has worldwide implications. The fear that Japan might be the next Asian domino to fall has kept international monetary officials, already dealing with a crisis in South Korea, the world's 11th largest ecoomy, and other Asian nations, on edge. "The initial reaction is likely to be selling pressure on the yen and equity markets and a firmer opening for U.S. Treasuries, said Kirit Shah, chief market strategist at Sanwa International in London. Japanese financial authorities were racing against the clock to pin down the details of a package before the markets opened on Monday. Bank of Japan sources told Reuters a special board meeting would be held on Monday morning on whether to extend special unsecured loans to Yamaichi. The Finance Ministry and central bank contacted overseas authorities to alleviate global concerns, especially in U.S. and European markets. The Bank of England said it was watching events closely. Fuji Bank Ltd, a major lender to Yamaichi, said it does not see any financial problems from the likely shutdown of the firm following rumors that a Yamaichi fall could also hit the bank. The Yamaichi crisis follows the collapse in the past month of second-tier brokerage Sanyo Securities Co. Ltd and 10th-ranking commercial bank Hokkaido Takushoku Bank. Finger-pointing has already started over what was behind the collapse in its centenary year of a Japanese household name that has a staff of 7,500 at home and 33 branches abroad. Takeo Nishioka, secretary general of the main opposition New Frontier Party, said Prime Minister Ryutaro Hashimoto's ruling Liberal Democratic Party had not acted decisively enough to ensure financial stability in Japan. "The Yamaichi Securities situation has undermined the trust of Japanese investors and international financial markets," Nishioka said on national television. The criticism added up to a unanimous view that Japan's financial system was in urgent need of reform, deregulation and closer supervision -- and there was more bad news to come. At its core, the liquidity crunch faced by Yamaichi has been driven by concern that creditors cannot pin down just how large the brokerage's potential losses could become, analysts said. "It's a story of lack of sufficient disclosure and supervision, said James Fiorillo, senior banking analyst at ING Barings in Tokyo. A Finance Ministry official said on Saturday there were suspicions of vast off-balance sheet liabilities exceeding 200 billion yen ($1.58 billion) from illegal trading practices. If that is only the extent of the problem, one industry source said that a "white knight might be found to pick up at least some of the pieces. But there were worries the numbers may be much larger, with possibly one trillion yen ($7.9 billion) accumulated from illegal deals since the 1980s. It is not the first time Yamaichi has been to the wall. It teetered on the verge of bankruptcy in 1965 when -- in the midst of a major stock market slump -- a newspaper report of financial woes caused panicked investors to demand money back. With scandals now appearing everywhere among Japan's "blue blood financial institutions, individuals were left wondering what to do. "I don't trust banks either, so I suppose I have no choice but to take my money to the postal savings service. said a 50-year-old graphic designer who was a long-time Yamaichi customer. ^REUTERS@