Japan – crumbling barriers. (cooperative banking in Japan) (supplement to Euromoney magazine: Co-operatives – the green banks go international)

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.