Ratings of Japan's banks downgraded
Tuesday 22 August 1995
The Japanese authorities' efforts to stem the erosion of confidence in the domestic finan- cial markets were dealt a severe blow yesterday by poor credit ratings for the banking industry from Moody's and Standard & Poor's.
The long-awaited financial strengths ratings from Moody's Investors Service, the rating agency, amounted to a harsh assessment, according the large banks a below-par C rating, and the trust banks and regional banks low D and E ratings.
This is the first time that Moody's has rated Japan's 50 leading banks, ravaged by bad loans following the bursting of the land and asset price bubbles of the early Nineties.
The C rating for the leading financial institutions is lower than ratings Moody's would normally have given big commercial banks in other industrial countries.
Stephen Lewis, of London Bond Briefing said: "The Moody's rating decision will tend to undo whatever good the Ministry of Finance and the Bank of Japan have achieved in allaying market concerns over Japanese bank stability. It is a reminder that bad and doubtful loans on the banks' books are still rising."
Standard & Poor's yesterday placed the debt ratings of five Japanese banks on credit watch with negative implications, citing the "length and severity of the problems facing the Japanese banking sector that have heightened the industry's overall risk profile". Mitsubishi Bank and Sanwa Bank short- and long-term debt ratings were placed on credit watch negative along with the long-term ratings of Dai-ichi Kangyo Bank, Fuji Bank and Sumitomo Bank.
Japanese analysts estimate that bad loans in the financial system total some 40,000bn (pounds 275bn), while private analysts believe the real figure could be much higher. In particular, there are fears that the true extent of the housing loan crisis has still to be revealed.
- 1 The BBC has just done more to eradicate ‘terrorism’ than all our wars since 9/11
- 2 Dog thinks owner is drowning in lake, dives in and tries to pull him out
- 3 Thank heavens for Louise Mensch and her foul-mouthed tweets to world leaders
- 4 Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
- 5 Phil Neville backtracks on Tomas Rosicky 'I'd smash him' comments from Match of the Day 2
Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
Greece elections: Greek PM Alexis Tsipras takes aim at 'neo-liberal' Europe as country gears up for prolonged austerity battle
Auschwitz liberation 70th anniversary: Woman sent to three Nazi death camps describes surviving gas chamber
Prince Philip set to be knighted by Australia: Celebrate by reading his greatest gaffes
New York snow: Winter Storm Juno downgraded as 'one of the largest snowstorms in history' fails to show
'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
British Muslim school children suffering a backlash of abuse following Paris attacks
Islamic history is full of free thinkers - but recent attempts to suppress critical thought are verging on the absurd
Leaked documents show Ukip leaders approve NHS privatisation once it becomes more 'acceptable to the electorate'
iJobs Money & Business
£16500 - £16640 per annum: Recruitment Genius: This fast growing Finance compa...
£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...