New Industrial Revitalization Organization Chief a Compromiser, Not a Reformer


Sadakazu Tanigaki is, a) a stalwart LDP politician, and b) has a dubious track record as a reformer. While at the Financial Reconstruction Commission (which was merged into the FSA) he tried to assemble a bailout for Sogo department stores, but due to the uproar it caused in the Diet, his Prime Minister Yoshiro Mori backed off and Sogo quickly folded. "I want to set up a hospital for sick companies that come out healthy", he said, which indicates to us that he may well end up placating the "debt junkies" habits without really seperating the unsavable from the saveable. Indeed, the FRC's short life span was plagued by political football and ineffective agency heads. When the FRC was first established, it was headed by a "hard line" reformer, Hakuo Yanagisawa. Yanagisawa-san was effectively booted from the post, and replaced with much more accomodative LDP politicians, including Mr. Tanigaki. It was all downhill after that. The IRO (Industrial Revitalization Organization) could well end up like the FRC--at the effective mercy of the LDP, and will stay that way as long as a main-stream LDP member heads the body.

Property Asset Values Have Shrunk JPY1.16 quadrillion


According to a White Paper on the economy released by economic czar Heizo Takenaka this week, property, including those sustained by companies, have amounted to 1.16 quadrillion yen (S$17 trillion) since the burst of the 1990 bubble.
The amount is twice the size of the country's gross domestic product.
(Straits Times)

"Tough Love Stance By Takenaka on Banks Produces Desired Reaction



Assets of the banking groups carrying credit risks, including loans, totaled 273 trillion yen as of March, down 28 trillion yen from the previous fiscal year. By reducing such assets by 30 trillion yen, the banks will reduce their total risk liabilities by a greater margin in the current fiscal year. This is about the same amount they reduced last year. The offloading of assets is expected to bolster the banks' capital-asset ratios by about 1 percentage point.


The biggest cut will be at Mizuho Financial, the world's largest banking group, which plans to shed 15 trillion yen from its asset portfolio. Sources said this is two to three times the initially planned amount. UFJ ranks second with planned cuts of 7 trillion to 8 trillion yen, followed by Sumitomo Mitsui Banking, which plans to add several trillion yen in cuts to its plan to reduce assets by 5 trillion yen.Mitsubishi Tokyo Financial, meanwhile, will slash assets by 2 trillion to 3 trillion yen.


While watered down, the new, tougher attitude by the FSA is having its desired impact, i.e., it is getting the banks to accelerate their bad loan write-offs.
(IHT/Asahi: November 9,2002) http://www.asahi.com/english/business/K2002110900194.html