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  1. #1
    Mid
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    Japan mulls $106b bailout fund for ailing banks

    Japan mulls $106b bailout fund for ailing banks
    By the Editorial Desk
    The Yomiuri Shimbun
    Publication Date: 27-10-2008

    The government in considering increasing the amount of state funds that can be injected into ailing banks and other financial institutions in the country to deal with the global financial crisis from the currently planned 2 trillion yen (US$21 billion)to about 10 trillion yen ($106 billion), sources said.

    It will announce an additional package of emergency market-support measures, which will include restarting the purchase of shares held by banks as early as Monday, according to the sources.

    Some lawmakers in the ruling party are concerned that the figure of 2 trillion yen, thought to be the amount the government was considering for the bank recapitalisation plan proposed in the bill to revise the Law on Special Measures for Strengthening Financial Functions, will be insufficient to prevent the deterioration of some financial institutions.

    This has prompted some Diet members to propose that the government should increase the amount to 10 trillion yen in a bid to demonstrate the government's willingness to do as much as it can to steady the financial system by ensuring that domestic financial institutions stand on a firm base.

    Kaoru Yosano, state minister in charge of economic and fiscal policy, said on a TV program Sunday: "The 2 trillion yen [the government currently plans as the maximum amount to be injected in the bank recapitalisation program] won't be enough. I think it will be necessary to make 10 trillion yen available, putting aside whether we actually use this sum."

    The government will soon decide details of the plan, according to the sources.

    Prime Minister Taro Aso discussed various issues, including measures to address the financial crisis, in a meeting with Finance Minister Shoichi Nakagawa at a Tokyo hotel Sunday evening.

    As early as Monday, the government plans to announce an additional package of measures to support the market and deal with the global financial crisis.

    The government announced on Oct. 14 it would temporarily freeze the selling of shares it holds as part of measures to stabilize the financial market. But it judged that it would be necessary to do more as it has been unable to prevent the recent heavy falls in the stock market, according to the sources.

    Among the additional measures, the government plans to restart purchases by Banks' Shareholdings Purchase Corporation (BSPC), an organisation comprising financial institutions in the private sector, of shares held by banks. It will also ask the Bank of Japan to start buying such shares again.

    The BSPC and the central bank previously purchased shares between 2002 and 2006 in a bid to hold up share prices.

    asianewsnet.net

  2. #2
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    everyone's squeezing for whatever they can beg, with the threat of simply packing up and going home.

  3. #3
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    Japan Shares Plunge to Lowest in Two Decades, Led by Banks
    By Masaki Kondo and Patrick Rial

    Oct. 27 (Bloomberg) -- Japan's stocks dropped to the lowest in more than two decades on concern tumbling share values will drag down capital at financial companies.

    Mitsubishi UFJ Financial Group Inc. and Mizuho Financial Group Inc. sank 15 percent on media reports they may raise capital through sales of new shares. Aioi Insurance Co. declined 20 percent, and Orix Corp., Japan's biggest non-bank financial company, dived 14 percent.

    ``In this kind of market that's moving without sensible reasons, only God knows what's going to happen tomorrow,'' said Yoshinori Nagano, a Tokyo-based senior strategist at Daiwa Asset Management Co., which manages about $96 billion. ``That's why people are so scared of what's ahead of them and sell whatever they have to avoid losses.''

    The Nikkei 225 Stock Average sank 457.43, or 6 percent, to 7,191.65 as of 2:24 p.m. in Tokyo. The gauge is set for the lowest close since November 1982 and a four-day plunge of 23 percent, the most since at least 1970. The Topix index fell 55.83, or 6.9 percent, to 750.28, poised for the lowest since July 1984.

    Mitsubishi UFJ may sell new shares to raise as much as 1 trillion yen ($10.6 billion) to improve its finances depleted by devalued stockholdings, the Nikkei newspaper reported yesterday. Mizuho Financial Group Inc. and Sumitomo Mitsui, Japan's second- and third-largest listed lenders, are also considering raising new capital, broadcaster NHK said.


    Government Action

    Japan's Prime Minister Taro Aso ordered officials to draft measures to help stabilize financial markets as early as today. Measures will include stronger oversight of short-selling of stocks and the purchase of shares held by the nation's banks. The Topix had fallen 45 percent this year through Oct. 24, wiping off $1.6 trillion from the market.

    Mitsubishi UFJ plummeted 15 percent to 583 yen, headed for the lowest close since listing in 2001, while Mizuho slumped 15 percent to 230,000 yen. Sumitomo Mitsui lost 11 percent to 385,000 yen, and Aozora Bank Ltd. plunged a record 31 percent to 66 yen.

    Aioi lost 20 percent to 330 yen, while T&D Holdings Inc., Japan's largest publicly traded life insurer, retreated 14 percent to 3,030 yen. Orix fell 14 percent to 9,190 yen, and Aiful Corp., the nation's fourth-biggest consumer lender by value, slid 10 percent to 371 yen.

    bloomberg.com

  4. #4
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    I can think of some govs and outfits that are chuckling into their sleeves.

  5. #5
    Thailand Expat Texpat's Avatar
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    My ex is Japanese.

    I'll never forget her father telling me in 1988, at the height of the Japanese bubble, when Japan was snapping up US companies and Honolulu resorts and golf courses, that Japan is the new world leader and would henceforth give the orders to it's former master, America.

    Ahhh, what happened Asasaburo?

  6. #6
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    Th bailouts in the UK, Iceland, and the US are doing such a good job of shoring up the stock markts that it is only natural the Japanese should try it.
    Last edited by Thormaturge; 27-10-2008 at 02:57 PM.

  7. #7
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    nobody leaping out of windows yet?

  8. #8
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    ^
    Not until the depositors begin demanding ther money back:


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