JAPAN CRUMBLING BARRIERS
Crumbling barriers between financial territories are reaching into
the cooperative sector as lending opportunities shrink and deregulation
takes its toll.
Although the Norinchukin bank, the central bank for agricultural,
fisheries and forestry co-operatives and the largest institution in
co-operative finance, has always been allowed to lend to non-members
such as allied industries and public entities, the definition of allied
industries has been broadened. Now, the bank's list of nonmember
borrowers ranges from manufacturers, wholesalers, and retailers to
public utilities, transportation and construction firms, commercial
banks and housing finance and other public institutions.
Nevertheless, lending has not kept up with deposits, with the
result that the bank has become a heavy investor in securities,
including Japanese government and foreign bonds, and a major supplier of
funds to the short-term money market. The same phenomenon has occurred
all the way down the three-tier agricultural co-operative structure to
the prefectural (county) credit...
