Discussions under way to bail out Japanese credit union

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The Independent Online
Busy tellers at the Cosmo Credit Union in Tokyo deal with depositors wanting to withdraw savings. The Tokyo Kyoda Bank, established in January to deal with two failed credit unions six months ago, looks set to absorb Cosmo, suspended from further trading on Monday. The bank took over Tokyo Kyowa and Anzen Credit under a bailout organised by the Bank of Japan. Total bad debts at Cosmo could be as large as 200bn yen.

The Tokyo municipal government will have to contribute up to 20bn yen to the bailout after the run on Cosmo. The rate of withdrawals fell sharply yesterday, but 20bn yen were still withdrawn, compared with 60bn on Monday.

Photograph: Reuters