Asian Financial Crisis

EVENT: Today, in its monthly report, the official Economic Planning Agency declared that the economy is in a prolonged slump and that business conditions are “extremely severe”.

SIGNIFICANCE: The report comes hard on the heels of the central Bank of Japan’s quarterly ‘tankan’ survey of business sentiment, which showed a marked deterioration in confidence. The deepening gloom may prompt the government to unveil a huge fiscal stimulus package next month. Read the rest of this entry »

The Changing Japanese Banking SystemThe banking system of any country has developed against the background of the country’s economic, political and social environment. The differences in the environment are clearly engraved on the structure and functioning of the system. This is particularly true in the case of the Japanese banking system. Its historical background and environment have made it quite different from American banks. Read the rest of this entry »

Talks involving financial officials of the G-7 major industrial countries plus 11 Asia-Pacific countries, held in Tokyo over the weekend, failed to advance any proposals to resolve the Japanese banking crisis, following last week’s US-Japan operation to halt the free fall of the yen.

While a joint statement declared that restructuring involving the wiping out of crippling bank debt and the deregulation of markets was “urgently needed,” and Japanese Finance Minister Hikaru Matsunaga declared the government would push ahead with economic reforms, no concrete measures were announced. This prompted widespread comments in financial circles that the yen would come under immediate pressure and could soon resume the downslide against the dollar which prompted the $6 billion intervention. Read the rest of this entry »