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Pastimes : Ask Mohan about the Market -- Ignore unavailable to you. Want to Upgrade?

To: geewiz who wrote (12381)	12/26/1997 10:21:00 AM
From: Defrocked	Read Replies (1) \| Respond to of 18056

NYTimes Dec.25 Sec.C3 "Japan Postpones Deadline for Sanctions on Banks" "The Japanese Finance Ministry, concerned that a decline in bank lending will lead to more business failures, today postponed the imposition of penalities on banks that do not meet its standard of financial soundness. The lack of bank credits 'is more serious than expected',said Finance Minister Hiroshi Mitsuzuka. The ministry postponed for one year sanctions that were to have taken effect on April 1 against banks whose capital as a proportion of assets do not reach the minimum domestic standard of 4 percent. In doing so, the ministry retreated from a policy of allowing market forces to weed out weaker banks." <snip> FM Mitsuzuka declared today that Japan's financial crisis was over and investors acted to push the Nikkei down 3.3%.(Source: Bloomberg Dec. 26 7:09EST) <snip> I believe the comic strip character,Pogo, had a great line for this: "We have seen the enemy and they are us"<g> More seriously, in the US, domestic banks get additional audit scrutiny once the Cap/Asset ratio declines below 8 percent. Below 6% warrants serious FDIC action occurs. Below 4% would be buyout time. In stark contrast, many Japanese banks cannot apparantly even achieve 4% with questionable accounting! Thus, the FM has extended by another 15 months the workout period for these highly leveraged and potentially insolvent financial institutions and has the further gumption to tell the market the situation has now been resolved. Confidence inspiring isn't it?<g>FWIW.