Japan to rescue Cosmo deposits
Tuesday 29 August 1995
The Japanese authorities have announced plans for a pounds 1.75bn wind-up of Cosmo Shinyo Kumiai, the Tokyo credit union that failed this summer after a run on its deposits.
Tokyo's city government, the Bank of Japan and Japan's deposit insurance body will contribute to the scheme. The rescue means depositors will get their money back, although some large ones will lose interest. Other private financial institutions will write off loans made by them to Cosmo.
The plan was described yesterday as crucial to restoring confidence in Japan's 400 credit unions, many of which have been battered by the country's huge bad-loans problem, estimated by the authorities to stand at more than pounds 300bn.
A senior finance ministry official said: "To protect the stability of the financial system in Japan, financial institutions have decided to co-operate in the scheme."
Tokyo's city government, responsible for supervising local credit unions, suspended part of Cosmo's operations four weeks ago after media reports of its financial troubles triggered a run on deposits.
Under the wind-up deal, Cosmo's business will be transferred to Tokyo Kyodo Bank, set up with Japanese government help to wind up two other failed credit unions. Unrecoverable loans at Cosmo totalled 235bn (pounds 1.5bn). Its creditors include some of Japan's biggest banks: Sanwa, Fuji, Tokai and Mitsubishi Trust & Banking Corp.
Bank of Japan and Tokyo city government and credit unions around Japan will contribute smaller amounts, with the bulk of funds coming from Deposit Insurance Corp of Japan, which insures depositors by using premiums from private banks.
- 1 Mario Balotelli: Staff at arson-hit Manchester Dogs' Home convinced Liverpool striker is behind five-figure donation
- 2 Scottish independence live: Scotland gives a clear 'No' in historic referendum - as it happened
- 3 iOS 8 is full of shiny new features - but it's terrible news for app developers
- 4 Friends 20th anniversary: Six things we wouldn't have without influential comedy series
- 5 Scottish independence: Tory revolt against 'devo max' grows as Rail Minister Claire Perry joins
Scottish independence referendum results: David Cameron pledges plans for 'English votes for English laws' by January
Scottish independence live: Scotland gives a clear 'No' in historic referendum - as it happened
Scottish referendum results: David Cameron set to unveil major devolution of powers to England
Iranian blogger found guilty of insulting Prophet Mohammad on Facebook sentenced to death
Scottish independence: Tory revolt against 'devo max' grows as Rail Minister Claire Perry joins
Daniele Watts: Django Unchained actress detained by Los Angeles police after being mistaken for a prostitute
Scottish independence referendum: A nation divided against itself
Scottish independence: David Cameron is becoming the 'George Bush of Britain'
Russia freezes Ukraine into submission: Kiev admits country doesn't have enough fuel for winter
Scottish independence: The Queen breaks silence on referendum debate – as think tank warns of £14bn black hole if Scotland votes Yes
Archbishop of Canterbury admits doubts about existence of God
iJobs Money & Business
£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...
Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...
£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...
To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...