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To: goldsnow who wrote (3966)	12/8/1997 11:05:00 AM
From: Bobby Yellin	Read Replies (1) \| Respond to of 116815

do you think that is the real reason? I thought the average Japanese citizen has great savings but since their last time being so badly burnt..they won't fuel their market with their savings..yet... also I keep on hearing ringing in my ears "bull markets climb the wall of worry."..(wish somebody would say that about gold)..anyways.. a few more collapses..and the Japanese market should be off to the races..(the worse it gets..the more the market movers start jumping on..) (didn't realize that that SWiss bank merger would make a lot of their oversea jobs vaporize..wonder how many companies will do the same thing and wonder how many more good corporate jobs will be lost)

To: goldsnow who wrote (3966)	12/8/1997 5:56:00 PM
From: goldsnow	Read Replies (1) \| Respond to of 116815

Analysts question reason for Japan loan disclosure 08:31 a.m. Dec 08, 1997 Eastern By Fumiko Fujisaki TOKYO, Dec 8 (Reuters) - Financial analysts said on Monday they were surprised by a report putting the total amount of problem loans held by Japan's banks at a huge 79 trillion yen ($607 billion) and questioned the reasons for the disclosure. Some analysts said the figures published in the leading financial daily Nihon Keizai Shimbun on Saturday may have been leaked by the authorities with the aim of deepening national understanding of the seriousness of Japan's bad loan mess. Policymakers in Tokyo are currently debating the politically sensitive question of whether and how public money should be used to clean up the bad loan-laden financial sector. Analysts said the 79 trillion yen figure for problem loans held by the banks as of the end of March was realistic, based on a new, stricter bank supervision system, but some added that it was somewhat misleading. The figure was three times bigger than the value of problem loans publicly announced by banks, but some analysts said that not all the loans the newspaper referred to should be regarded as problematic. ''It is unclear...why such a figure was revealed at a time when fears about financial stability in Japan are mounting,'' said Akira Takai, an analyst at Daiwa Institute of Research. ''Each financial institution may come under pressure to improve their disclosure because of the revelation, and the figure may help create the conditions for the use of public money to resolve the bad loan problem,'' he said. The Nihon Keizai Shimbun said the new problem loan figure was based on the prompt corrective action (PCA) system, which goes into official use next year. A senior Finance Ministry official declined to confirm the report. ''I have not heard this sort of figure for problem loans before,'' he said. Under the PCA system, assets are classified in four levels according to likelihood of recovery. The loans reported by the Nihon Keizai Shimbun fell into levels two, three and four. Level one assets are considered to carry no concerns over recovery, while those at level two are regarded as loans with credit concerns whose recovery may be more difficult than ordinary obligations. Level three comprises assets linked with management difficulties but not immediate bankruptcy, while level four assets are considered impossible to recover, analysts said. ''Japanese banks are not required by the Finance Ministry to dispose of potential losses from level two assets,'' said Yoshinobu Yamada, an analyst at Merrill Lynch Japan. ''Level two assets are regarded as sub-standard, while level three assets are classified as doubtful and level four assets as losses,'' Yamada said. The Finance Ministry official said that in the past the ratio of losses from level two assets for Japan's big banks had been only about two percent. An analyst at a foreign securities house, who did not want to be identified, said the authorities might have leaked the data to boost support for the use of public money to save weak banks. ''There is controversy over whether public funds should be used to save financially weak banks, and the leak of the figures to the newspaper might have been aimed at seeking measures to help boost capital at those weak banks,'' he said. Japan's ruling Liberal Democratic Party (LDP) is expected on Wednesday to unveil a set of proposals intended to stabilise the financial system. Those proposals, combined with other economic steps, are expected to be included in an LDP economic stimulus package to be unveiled on December 16. Analysts predicted that the LDP would recommend the use of public funds to guarantee loans made to the Deposit Insurance Corp of Japan, a quasi-governmental body that aims to protect depositors when financial institutions fail. However, controversy has surrounded the proposed creation of an organisation to buy preferred stock and subordinated bonds issued by financial institutions to help strengthen their asset base. Yamada said he thought it would acceptable to use public money to bail out banks that have fallen into more difficulties recently as a result of tough market conditions following a series of collapses of big financial firms last month. He said the costs of dealing with Japan's bad loan situation would increase should such banks fail. ''So public money had better be used before they actually fail. But strict conditions must be imposed, such as changing management, improving disclosure and stepping up restructuring efforts.'' A Finance Ministry source told Reuters Japan was unlikely to resort to selling some of its massive holdings of U.S. Treasuries to help raise dollars for troubled banks, a possibility that has spooked world financial markets. The source, commenting on a Japanese media report on Sunday that said the LDP may push for a sale of Treasuries, said that if Tokyo were to take steps to raise dollars, Treasuries would be used as collateral in transactions with U.S. authorities. ($1-130 yen) ((Tokyo Equities Desk +81-3 3432-9404 tokyo.equities.newsroom+reuters.com)) ^REUTERS@ Copyright 1997 Reuters Limited. All rights reserved.