Why Japan-style malaise could happen

Charles Jannuzi b_rieux at yahoo.com
Thu Sep 12 01:01:48 PDT 2002



>>What's different is that part of the reason
Japan has been unable to come off the mat, aside from the aftermath of its mania, is that the Japanese banks have kept businesses alive that should have gone bust. These are often referred to as the zombie companies: "alive, but nearly moribund."<<

Japan has had record numbers of bankruptcies in the past 10 years. Corporate bust ups are handled somewhat differently, with banks and creditors coming together on more deals outside of court--I believe anyway. Still, it's misleading to say that the Japanese banks have just kept zombies alive. The danger is that the banks are the zombies, especially now that they have to meet the 8% capital adequacy ratios. I found the article rather worthless actually, by the way. Anyone who knows so little about Japan probably knows little more about the US other than the fact that he lives there.

CJannuzi

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