JК
Dogs and Demons :: Керр Алекс
Страница: 60 из 270Obviously, size alone is not a good measure of financial health, since liabilities may equal or even exceed assets, and the truest measure of health is profitability, in which case not a single Japanese bank got into the top one hundred.
Lack of profits sapped the energy of Japanese banks, so that in time foreign banks outstripped them through profitable growth and mega-mergers. By July 1999, only two Japanese banks had made it into the world's top ten. One had a negative return on assets, the other nearly zero – at a time when Citigroup and BankAmerica, the top two on the list, were making more than 1.3 percent returns on much larger asset bases.
In Japan's asset-based system, size meant everything; in time, therefore, MOF mandated a wave of mergers so that Japan's banks could reclaim their position as the world's largest. Moriaki Osamu, the director of the Restructuring Agency, is reported to have said, «In order to preserve the financial system we have to shut our eyes [to unprofitable banks]. But, since they can't survive on their own, we've ordered them to merge.» In other words, Japan's bank mergers simply combined small hills of losses into larger mountains of losses. In August 1999, three banks – DKB, IBJ, and Fuji Bank – merged to create the world's largest bank by assets, yet the merger did nothing to make the resulting behemoth profitable. The well-known consultant Ohmae Ken'ichi compares the bank to the Yamato, Japan's giant warship in World War II that sank before it had a chance to fire its guns. By mid-2000, Japan once again had four of the five largest world banks – all of them huge money – losers.
This did not disturb MOF, however, because in Japan's credit system losses and debt have no consequences. Banks rarely make unfriendly recalls of debt within their keiretsu (industrial groupings), allowing companies within their grouping to borrow safely far more than their counterparts in the rest of the world. It has been in a company's best interest to borrow as much as it can so as to acquire more and more capital assets and never to sell them. A company would borrow against assets such as land, and then reinvest that money in the stock market. The market would rise, and the company would then have «latent profits» against which to borrow more money, with which to buy land. And on to the next round.
This cycle of assets-debt-assets is the background for the madness that seized Japan during the Bubble. It explains why IBJ lent Madame Nui money to buy IBJ's own bonds in a deal that cost her $30 million the moment she signed the contract. IBJ knew well why she wanted those bonds.
Lack of profits sapped the energy of Japanese banks, so that in time foreign banks outstripped them through profitable growth and mega-mergers. By July 1999, only two Japanese banks had made it into the world's top ten. One had a negative return on assets, the other nearly zero – at a time when Citigroup and BankAmerica, the top two on the list, were making more than 1.3 percent returns on much larger asset bases.
In Japan's asset-based system, size meant everything; in time, therefore, MOF mandated a wave of mergers so that Japan's banks could reclaim their position as the world's largest. Moriaki Osamu, the director of the Restructuring Agency, is reported to have said, «In order to preserve the financial system we have to shut our eyes [to unprofitable banks]. But, since they can't survive on their own, we've ordered them to merge.» In other words, Japan's bank mergers simply combined small hills of losses into larger mountains of losses. In August 1999, three banks – DKB, IBJ, and Fuji Bank – merged to create the world's largest bank by assets, yet the merger did nothing to make the resulting behemoth profitable. The well-known consultant Ohmae Ken'ichi compares the bank to the Yamato, Japan's giant warship in World War II that sank before it had a chance to fire its guns. By mid-2000, Japan once again had four of the five largest world banks – all of them huge money – losers.
This did not disturb MOF, however, because in Japan's credit system losses and debt have no consequences. Banks rarely make unfriendly recalls of debt within their keiretsu (industrial groupings), allowing companies within their grouping to borrow safely far more than their counterparts in the rest of the world. It has been in a company's best interest to borrow as much as it can so as to acquire more and more capital assets and never to sell them. A company would borrow against assets such as land, and then reinvest that money in the stock market. The market would rise, and the company would then have «latent profits» against which to borrow more money, with which to buy land. And on to the next round.
This cycle of assets-debt-assets is the background for the madness that seized Japan during the Bubble. It explains why IBJ lent Madame Nui money to buy IBJ's own bonds in a deal that cost her $30 million the moment she signed the contract. IBJ knew well why she wanted those bonds.