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THE JAPANESE BANKING INDUSTRY

A STUDY OF THE JAPANESE BANKING INDUSTRY

Rohwer (1998) paints a disturbing picture of the Japanese Banking Industry. He states that "much has happened in America's S&L crisis in the early 1990s, bad banks need to be shut down or taken over, good banks recapitalized, bad loans written off, and the collateral underlying them (usually real estate) disposed of at firesale prices" (Rohwer, 1998, 22). Most theorists and analysts point out that the baddebt problem of Japanese banks could amount to upwards of 25% of that country's GDP, implying that a solution (if available) is "bound to be enormously painful and costly" (Rohwer, 1998, 22).

Also in 1998, the year that the Japanese banking system proposed a plan (of sorts) for bailing out the economy, the Economist in London pointed out that Japan's economy has

stalled and bankruptcies, already at record levels, are increasing. Then there are loans by Japanese banks to companies elsewhere in Asiaa whopping $276 billion, according to the Bank for International Settlements, although the true figure is probably much higher. Bankers have already had to roll over many of these loans, and, thanks to currency crises and economic collapses, a large proportion will probably end up unrecoverable. It is perhaps no coincidence that Bank of TokyoMitsubishi and Sanwa Bank have the largest Asian loan books ("Japan's Battered Banks..." 1998, 12).

Japanese Culture and Its Relationship to Banking

Several years ago, researchers began investigating the relationship between Japanese Capitalism and Western Capitalism. Johnson (1993) pointed out that the differences between the two types of Capitalism are profound and point to changing and evolving theories of economics.

This dichotomy of attitudes is the result, suggests Johnson, of many factors, most predominant of which was a certain blindness on the part of the West to acknowledge that Japanese capitalism was indeed different from...

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THE JAPANESE BANKING INDUSTRY. (1969, December 31). In LotsofEssays.com. Retrieved 07:55, March 29, 2024, from https://www.lotsofessays.com/viewpaper/1706767.html