business

Banker hopes for smalltown encore with 'curtain call' loans

5 Comments
By Junko Fujita

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Corporate closures hit a 10-year high last year. This is the truth about Abenomics. Many are being forced into bankruptcy. It is good to read it because so often, far too often, Abenomics is praised.

It is also interesting to note that this article came from the foreign press, not the Japanese press.

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Banks loan money in hope of earning a return on that money. They are required by law not to be frivolous with money, and they owe it to their depositors to be careful with their money. If they loan money for a new business startup, they want to be reasonably certain that the startup will succeed. The bread-and-butter of all banks is small business. But small business in Japan is suffering. The decline in the population is decreasing the numbers of customers, workers, and business owners. 70% of Japanese businesses are "loss-producing". In such an environment, starting a small business has never been riskier. And banks do not make high risk loans.

Added to this, though Japanese banks are sitting on a lot of assets, much of those assets are government bonds. All of the money possessed by Japanese banks adds up to 1350 trillion yen. The amount of JGB's is well over 1000 trillion yen, most of which are held by the banks. If you subtract banks' bond holdings, how much cash is left over?

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This guy is SMART not to get involved with mergers, this always seems to be the solution, larger company buy smaller dying company...............result, larger MUCH weaker company

Japan would be better off letting weak companies go under so those still around can pick up the slack, hire more staff as needed & grow stronger instead of weaker, but that seldom happens, usually some company is suckered/pushed into a merger

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While reading comment responses such as |"They are required by law not to be frivolous with money, and they owe it to their depositors to be careful with their money" seems to me that most frivolous misuse of money comes not from the depositor themselves but by crooked politicians and leaders of the businesses that the loans are awarded too. If anything the US went through phase and it only lead to disaster much that continues today and hard to recover from economic ruin.

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Although economy depend in labor, it does effect also population if we don't measure strength among our workers to repopulate our nation so as family matters as consolation...

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