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To: Defrocked who wrote (7351)	10/1/1998 12:05:00 PM
From: Joseph G.	Respond to of 86076

<<TOKYO, Oct 1 (Reuters) - Problem loans in Asia are likely to total more than $1.2 trillion, a report by investment bank Lehman Brothers said. The report was prepared by Lehman's Asia bank analyst Robert Zielinski to coincide with next week's International Monetary Fund and World Bank meetings in Washington. In the report, Zielinski said investors hoping for a quick fix for the region's debt problems would be disappointed. While he urged Asian countries to adopt new bank regulation, accounting and disclosure methods, he said banks must alter their lending practices before any significant improvement could be seen. "Many had been expecting a quick-fix solution in the form of government-led recapitalisation," he wrote. "However, without first changing the structural problems afflicting the industry, a recapitalisation would simply be a waste of money." The report praised progress made in Thailand, Indonesia and South Korea -- all of which are receiving aid from the IMF. It said, however, that Japan and Malaysia, neither of which are getting assistance from the IMF, were lagging in the restructuring process. Zielinski said the crisis is leading to a nationalisation of banks throughout the region that was different in character from nationalisations in the 1960s. "Unlike the 1960s wave of bank nationalisation, which was driven by the desire of governments to control their banking industries, insolvency and the need to protect depositors are driving the current wave," he said in the report. "Yet regardless of the motivation, the outcome is that Asian banking is returning to government hands." >>