[lbo-talk] Japan Braces For Threat Of Systemic Crisis

Dwayne Monroe idoru345 at yahoo.com
Sun May 18 20:23:18 PDT 2003


Is this a strong precautionary measure or a bandaid on a gaping wound? And, will we see such things next?

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> From The Financial Times Online

Original Link -

..... http://news.ft.com/servlet/ ContentServer?pagename=FT.com/ StoryFT/FullStory&c= StoryFT&cid=1051390111637&p=1012571727088. .....

Japan braces for threat of systemic crisis

By David Pilling and David Ibison

Published: May 18 2003 16:10 | Last Updated: May 18 2003 16:10

Japanese markets will be braced for turmoil on Monday after the government invoked emergency legislation on the weekend to bail out Resona, effectively nationalising Japan's fifth-largest bank.

Resona, which will remain listed on the stock market, will receive about Y2,000bn in state funds, bringing its capital adequacy to 10 per cent, well above the 4 per cent required for a domestic bank. It will be overwhelmingly owned by the state.

Heizo Takenaka, economy and financial services ministry, said the government had acted to stave off a systemic crisis, but he denied that capital injections would be extended to other banks.

The Financial Services Agency said that Resona, whose accounts were questioned by auditors, would open as normal on Monday and that all deposits would be guaranteed.

Junichiro Koizumi, prime minister, said: "I won't let any financial crisis occur. I dealt with [the matter] this time not to provoke any concern among depositors or corporations doing business".

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