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. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

Japanese megabanks: No illusions, no surprises?

The Japanese megabanks claim there are no shocks to come on the sub-prime losses front. If true, it’s a big leap forward for transparency.

Can Japan’s megabanks ignore the devil's whisper?

The last time a financial crisis hit Japan, the fallout was exacerbated by the agonizing slowness with which management disclosed their problems. This time around executives at all three financial groups have told Euromoney that their firms had little to hide; that they had disclosed almost all of their exposure to sub-prime related securities.

According to FSA figures, the sum for all Japanese banks now stands at just over ¥600 billion (about $6 billion), less than the total loss at some US banks but still three times as much as had initially been disclosed. This is an ominous trend. The ever-increasing scale of the losses might be explained by cumulative write-downs as sub-prime related investments bleed value: the banks, in other words, are disclosing losses as their portfolios lose value.

There might, however, be some truth to the suspicions of traders at foreign banks in Tokyo that some megabanks decided not to announce losses in order to make an already-disappointing reporting season less depressing for shareholders.

Analysts at Standard & Poor’s and Japanese firm Rating and Investment Information say that there are more losses to come but that they don’t expect significant surprises on the scale of write-downs at the worst-hit US banks.

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.


Unlimited access to and

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


Unlimited access to and, 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


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