Japanese leaders appeal for calm after another bank collapses
Thursday 27 November 1997
Hiroshi Mitsuzuka, the minister of finance, and Yasuo Matsushita, the governor of the Bank of Japan (BoJ), repeated their promise to protect depositors after the small Tokyo City Bank became the third Japanese financial institution to collapse in less than a fortnight.
"We strongly urge the public not to pay heed to irresponsible rumours and to act calmly," their joint statement said. "The stance of the Ministry of Finance (MoF) and the BoJ is that we will provide funds smoothly and without hesitation so that repayment of financial firms' deposits and other payments will not be hindered."
The demise of Tokyo City Bank, a small regional bank based in the northern city of Sendai, follows the collapse last Monday of the 10th-ranked Hokkaido Takushoku Bank and, three days ago, of the brokerage Yamaichi Securities. But the news had little effect yesterday on the stock market, which rose 3 per cent at one point to close up 178 points, or 1 per cent at 16,045.
Investors seem to be increasingly confident that the government will eventually use public funds to stabilise the financial system by providing loans to weakened banks which still have relatively sound business. Japanese finance houses are suffering a credit squeeze, caused by eroded confidence among foreign lenders.
Yesterday the credit rating agency Moody's Investors Service said it was contemplating downgrading the Long-Term Credit Bank of Japan, Nippon Credit Bank, and the three trust banks, Mitsui Trust, Yasuda Trust, and Chuo Trust.
Ominous rumours circulated about other firms, and several shares in the financial sector were down sharply. Among the brokerages, Nikko Securities' shares went down, as did the smaller Taiheiyo Securities.
Daiwa Securities, Japan's second largest, held a press conference to deny market rumours that it had concealed off-the-books losses, a ploy which contributed to the demise on Monday of its competitor, Yamaichi.
The president of Nippon Credit Trust told journalists in New York that, contrary to rumours, his parent company, Nippon Credit Bank, had shown "marvellous" results.
The biggest institution to be the subject of rumours is Fuji Bank, the main creditor of Yamaichi Securities which, like the entire financial sector, is labouring under the burden of bad loans left over from the 1980s "bubble" economy.
- 1 The Boy in the Dress, TV review: David Walliams' Boxing Day treat is a celebration of being different
- 2 Exclusive: Abusers using spyware apps to monitor partners reaches 'epidemic proportions'
- 3 Andy Murray takes to Twitter to show off his Christmas jumper
- 4 Margaret Thatcher 'expressed fears of Asian rising' at Anglo-Irish summit in 1984
- 5 Katie Hopkins speaks out on childhood obesity: 'Parents of fat children should be prosecuted for child cruelty'
PlayStation and Xbox hacked by Lizard Squad
Exclusive: Abusers using spyware apps to monitor partners reaches 'epidemic proportions'
Dublin court rules brain-dead pregnant mother's life support can be switched off
Margaret Thatcher 'expressed fears of Asian rising' at Anglo-Irish summit in 1984
The 'Black Museum': After 150 years, public set to see exhibits from police’s grisly crime museum
British actor Idris Elba cannot star as James Bond because he is black, says shock jock Rush Limbaugh
Rozanne Duncan: Ukip expels councillor for 'jaw-dropping' comments made in BBC TV interview
Germany anti-Islam protests: 17,000 march on Dresden against 'Islamification of the West'
Ukip member gets into Christmas spirit with Union Flag plea to Santa 'for our country back'
BBC director Danny Cohen: Rising UK antisemitism makes me feel more uncomfortable than ever
Katie Hopkins speaks out on childhood obesity: 'Parents of fat children should be prosecuted for child cruelty'
iJobs Money & Business
Not specified: Selby Jennings: VP/SVP Credit Quant Top tier investment bank i...
Not specified: Selby Jennings: Quantitative Research | Global Equity | New Yor...
Not specified: Selby Jennings: SVP Model Validation This top tiered investment...
Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...