The French had the original idea of folding three financial institutions into one, thereby creating the $1 trillion bank. But the Japanese may be the first to consummate such a deal.
The alliance between Industrial Bank of Japan, Dai-Ichi Kangyo Bank and Fuji Bank, due to be unveiled today, will be the world's biggest bank with assets of $1.3 trillion, eclipsing the two European monsters Deutsche Bank and UBS and quite possibly beating BNP-Societe Generale-Paribas to the punch.
By market capitalisation, it will rank a more modest fourth, with a value half that of Citigroup. As for profitability, we'd rather you didn't ask. In the past year the three Japanese banks have lost somewhere in the region of $8bn.
They are still paying the price for the bubble economy which the Japanese banking industry created in the late Eighties by heavy and often reckless lending against soaring equity and real estate prices. When the bubble inevitably burst, it consigned the country to its longest and deepest recession since the war.
The banks have taken an awful long time to write down those loans to their true value to avoid bankruptcy and a systemic collapse in the banking system.
It was only in March of this year that the Japanese government launched a seven trillion yen lifeboat to help keep afloat 15 of the country's biggest banks, the three merging banks among them. The Japanese economy is still convalescing which means that the banks remain a long way from achieving acceptable levels of profit.
But there is another challenge looming on the horizon in the shape of Japan's Big Bang.
Unless its banking industry has its act together by March, 2001, it will be battered all over again by financial deregulation and competition from big foreign banks.
Consolidation seems to be the answer to this competitive threat. Who knows, by the time Big Bank arrives, Japan's 18 big banks may have shrunk to as few as six with the encouragement of the government.
For Japan's salarymen, it will not be a pleasant experience. The job losses and branch closures involved could be on a scale not witnessed since the war.
But the option of doing nothing would be infinitely worse for the Japanese economyReuse content