The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.

Japanese economy: A revitalizing influence

Industrial Revitalization Corporation
of Japan's CEO, Atsushi Saito, plans
to reignite bad loan disposal.

FOR THE PAST 10 years investors have looked on with incredulity at the inaction of those charged with directing the Japanese economy, particularly the banking sector. For while it is plain that it needs comprehensive restructuring, nothing seems to get done. And as long as fighting between political factions of the ruling Liberal Democratic Party persists, and decisions and plans in the banking system are driven by self-interest, nothing will change.


Those in the upper echelons of power in Japan do understand the need to restructure and repair severely damaged banks reeling under a mountain of bad debt estimated at ¥44 trillion ($371 billion). And those in the banks themselves understand this. But they still fail to act, unable to reach agreement between themselves and with the government on just about every topic. For as long as there is a state of paralysis, bad borrowers, primarily in the retail and property sectors, remain in a state of limbo, like the living dead. Too sick to restructure themselves, they survive on a mix of government injections and yet more loans from banks that feel they have no choice but to continue throwing good money after bad.


You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree