Report: Japan’s major banks dealing with $32 billion in bad loans Pressure grows for nation to address banking woes

ASSOCIATED PRESS TOKYO, March 22 — Japan’s top 16 banks will book a total of $32 billion (4 trillion yen) in bad loans for the fiscal year ending in March, up 60 percent from their previous forecasts, the nation’s leading business daily reported Thursday. SEVERAL BIG BANKS will likely be posting losses for the fiscal year, the Nihon Keizai Shimbun said, as sliding stocks and dwindling land prices for collateral bite into their ability to dispose of towering dubious loans. Three banks forming the UFJ Group, Sanwa Bank, Tokai Bank and Toyo Trust & Banking Co., have already announced expected losses for the fiscal year of $1.8 billion, mainly because of bad loans of $8.9 billion — nearly double the initial estimate. Bank of Tokyo-Mitsubishi, Asahi Bank and Daiwa Bank may also be headed toward net losses, depending on losses on the Tokyo stock market, where share prices have recently fallen to 16-year lows, according to the report, which did not cite any sources. Banks are major shareholders on the Tokyo Stock Exchange. Pressure is growing around the world for Japan’s banks to start dealing with the bad-loan disaster at the root of a decade-long slowdown — which in turn is threatening to hurt other economies and set off a global decline in stock prices. Advertisement

Banks have stalled dealing with the problem for years, despite a public bailout approved in 1998. The continuing erosion in stock and land prices, as well as the recent slowdown in the United States, have only worsened their troubles. http://www.msnbc.com/news/548025.asp

-- Carl Jenkins (somewherepress@aol.com), March 22, 2001