IBJ bail-out sends Nikkei soaring
Thursday 22 October 1998
IBJ's decision to agree tough financial conditions in return for an injection of capital from the government sparked hopes that other major banks would also take part in the reforms.
The Japanese government has set aside 25 trillion yen (pounds 130bn) to help the country's debt-ridden banks shore up their capital bases and increase lending to Japanese business.
Stephen Lewis, chief economist at Monument Derivatives, said: "Confirmation that IBJ will apply for public funds indicates that the terms on which the funds are to be made available will not, as had been feared, be too onerous for any bank to consider taking them."
News of the move sent the Nikkei soaring by 3 per cent to close at 14,216.33, up 408.28 points. Despite market hopes, the signs were yesterday that other major Japanese banks could be slow to follow the lead set by IBJ, Japan's seventh-biggest lender.
A spokesman at Bank of Tokyo-Mitsubishi, Japan's largest bank, said: "We are considering the matter but have not made any decisions yet."A Sakura Bank spokesman said: "We applaud the passage of the [bank recapitalisation] bills. But at a time when conditions [to obtain public funds] have not been decided yet, we would like to make utmost efforts to raise capital on our own."
Mr Lewis said: "IBJ's example will not necessarily be followed by the city banks. IBJ is a long-term credit bank, a type of institution that is widely recognised as having no future in the deregulated capital market that the Japanese authorities are seeking to establish."
Analysts cautioned against viewing the government's plans as the definitive solution to the problems of the Japanese financial system. Brian Waterhouse, at HSBC Securities, said it "may go some way to recapitalising the banks, but I doubt it will have any real impact on the credit crunch at all".
- 1 Paris attacks: Do not call Charlie Hebdo killers 'terrorists', BBC says
- 2 Man who held up 'hire me' sign at Waterloo station returns a year later with 'I'm hiring' sign
- 5 The enemy within: People who hear voices in their heads are being encouraged to talk back
Paris attacks: Do not call Charlie Hebdo killers 'terrorists', BBC says
Rowan Atkinson to sell £10 million McLaren 'supercar' he crashed into a tree and a lamppost
UK weather: Snow to fall in the coming week with sub-zero temperatures to last until early February
Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
Howard 'Mr Nice' Marks reveals he has inoperable cancer: 'I've had an incredible life'
Nigel Farage: NHS might have to be replaced by private health insurance
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
French court convicts three over homophobic tweets, in case hailed as a 'significant victory' by LGBT rights campaigners
Greece elections: Syriza and EU on collision course after election win for left-wing party
George Galloway condemns 'racist, Islamophobic, hypocritical rag' Charlie Hebdo at freedom of speech rally
British Muslim school children suffering a backlash of abuse following Paris attacks
iJobs Money & Business
£30000 - £32000 per annum + benefits : Ashdown Group: A highly successful, int...
£18000 - £20000 per annum: Recruitment Genius: This rapidly expanding business...
£25 - 28k + Bonus: Guru Careers: An In-house / Internal Recruiter is needed to...
Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...