Japanese bank bailout

[Doug Henwood]

[The lead paragraphs of an email update from the Grant's Interest Rate
Observer conglomerate. It's written by Jeff Uscher, editor of Grant's Asia
Observer. A $513 billion recapitalization is a serious bailout. It took the
U.S. economy about 5 years to recover after the thrift/bank bailout was
launched in 1989, but the stock market did just fine. - Doug]


>Japan To Pass Y 60 Trillion Bank Bailout Legislation Tonight
>October 12, 1998
>
>Late in the evening of October 12 (Tokyo time) the Liberal Democratic
>Party (LDP) managed to break the opposition logjam that had, until now,
>prevented the passage of crucial banking legislation. The six banking
>bills, which have been languishing in the Diet for months now, are
>expected to be passed by the Lower House tonight (October 13 Tokyo time)
>and will then be sent to the opposition-controlled Upper House. It is
>expected that the Upper House will pass the bills into law before the
>end of the current Diet session on October 16.
>
>Readers should understand that the new laws are not intended to reform
>the Japanese banking system. This is a bailout package--and a very
>generous one at that. In total, Y 60 trillion (US$513 billion) will be
>allocated to recapitalizing Japan's rotting banking system and for
>indemnifying depositors.