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To: Ramsey Su who wrote (6072)	6/28/1998 10:10:00 PM
From: Zeev Hed	Read Replies (1) \| Respond to of 10921

Ramsey, assets are assets and liabilities (like those deposit or loans from other banks) are liabilities and net tangibles are the assets less the liabilities. If that figure (net tangibles) is 5% (good enough for a domestic bank) and the potential loss is 5.7%, the losses come out of the net tangibles, and those go negative, that is when the bank goes belly up. One of the problems, of course, is that adequate reserves for bad loans were not taken out, and furthermore, the assets side of the equation includes real estate and stock at the value these were acquired, marking these to market, could also result in net assets becoming smaller than net liabilities, thus wiping out the net tangibles and with it the bank. Zeev

To: Ramsey Su who wrote (6072)	6/28/1998 10:13:00 PM
From: Ron Bower	Read Replies (1) \| Respond to of 10921

Ramsey (& Zeev), I don't remember what the actual number is, but US banking regulations do not allow a bank to put anywhere near 92% of the deposits into loans. The number is more like 70% and an amount must be paid into the FDIC to insure deposits. The US system also has inspectors reviewing each loan the banks makes, particularly business loans. Does Japan have a similar system? Do they regulate the percentage of deposits that can be loaned out? ... insure depositors funds? ...have similar review and inspections of bank operations? TIA, Ron