The entire Ministry of Finance, Banking Bureau and the Bank of Japan were all surprised.
Because as early as May last year, the Bank of Japan carried out large-scale institutional reforms, an important part of which was the establishment of the Credit Institutions Bureau.
Tadayo Homma is the director-general. The agency is divided into a Credit Institutions Division and a Payment and Settlement Division. The former is responsible for financial regulatory supervision and macro-prudential policies, while the latter is responsible for formulating relevant policies for the payment and clearing system.
At that time, stock prices peaked and then began to fall, land prices continued to rise, and the economy was still in a bubble expansion stage.
President Yasushi Mieno had already instructed in the conference room to formulate a response strategy for the Bank of Japan to prevent possible bankruptcy crises of financial institutions.
Subsequently, with the Credit Institutions Bureau as the core, repeated discussions were held on the possible bankruptcy of financial institutions.
Initially, the focus was only on a few institutions that were considered problematic and were listed on the "key supervision list", such as Toho Mutual Bank, Osaka Prefectural Credit Union, Kamaishi Credit Union, and other relatively small financial institutions that provided loans to small and medium-sized enterprises or micro-enterprises.
However, due to the problems of Sagara Mutual Financial Kizu United Credit Union, the target was expanded to include slightly larger financial institutions represented by Hyogo Bank and Pacific Bank.
But BCCI is not on the key supervision list or the risk list.
“Before this, was there any notice of the debt problems of BCCI?”
"No. But according to the published prosperity benchmark date, the peak of economic prosperity occurred in February of this year, between the peak of stock prices and the peak of land prices. The real GDP growth rate has dropped sharply from 5.1% in 1990 to 3.8%. It seems that the total quantity control directive has had too great an impact."
The so-called total quantity control means that the growth rate of loans provided by financial institutions to the real estate industry shall not exceed the growth rate of total loans, and at the same time, it requires regular reporting on the execution of loans to the "three industries" of real estate, construction and non-bank financial institutions.
This instruction was issued by the Banking Bureau in March 1990 and approved by Ryutaro Hashimoto himself.
The purpose at that time was to deleverage and eliminate market bubbles, which would make the economy healthier and prevent unexpected accidents in Eastern Europe. However, the stock market received immediate feedback, but land prices did not.
This also gave the Bank of Japan a reason to raise interest rates. Mieno Yasushi even used the righteousness to force the Bank of Japan to stop commercial housing loans through window guidance.
There is no doubt that the issuance of the total quantity control directive was undoubtedly the fuse for the sharp drop in land prices.
However, the Bank of Japan's heavy volume increase was like the stone that broke the camel's back, making things worse and worse.
Sanchong, that old bastard.
Clearly realized that he had been cheated.
Because total quantity control will never make things so bad, but the Bank of Japan directly and explicitly prohibits the proportion of real estate and real estate loans, and 70% is too serious.
Just like a joint stock company.
Liquidity is like blood, maintaining the lifeblood of a company. Given the huge size of the real estate industry, the limit on real estate loans was suddenly raised from 30% to 70%.
The result would be like a river with a dam built on it, damaging the downstream ecosystem and inevitably leading to destruction.
Ryutaro Hashimoto cursed inwardly.
But he knew in his heart that even if it happened again, he would still have to make the same choice under the circumstances.
After the meeting.
This Kendo Minister of Finance rarely lit a cigarette.
I was wondering before why this guy Haibu suddenly turned against us, but now I understand a little bit.
According to the rules of Japanese politics, if one fails to fulfill his duties, he must step down. However, if he leaves at an excellent time, stepping down may be a form of dormancy, during which he can wait for an opportunity to make a comeback.
That's the situation.
It is no longer possible for him to challenge the position of Prime Minister.
Even this guy Kaibu is playing badly.
When all the problems break out, no one can do anything!
Next.
That is, a financial credit bureau intervened in the bankruptcy liquidation of BCCI.
According to the procedures, there are three departments that are responsible for handling the bankruptcy of financial institutions, mainly the Banking Bureau of the Ministry of Finance, plus the Bank of Japan and the Deposit Insurance Corporation.
The law stipulates that the chairman of the Deposit Insurance Corporation shall be a deputy governor of the Bank of Japan, so Deputy Governor Hiroshi Yoshimoto also serves as the chairman of the Deposit Insurance Corporation.
In addition, each major life insurance institution and large urban bank also has a vice president serving as a member of the research group. Among them, Japan Life Insurance, as the largest insurance company, also has a vice president in charge of insurance control.
But not long ago, there was a major reshuffle at Bioho, and the vice president who held this position was hospitalized due to a sudden heart attack. The assistant to this position became the president of the Kansai headquarters, Naoyo Nagano.
morning.
Bank of Japan headquarters building.
The Deposit Insurance Corporation Affairs Bureau is located on the third floor here.
There are only a dozen full-time staff members, and most of the others are seconded personnel or OBs from the Bank of Japan, as well as members of a department at the Economic Research Institute.
This is a bankruptcy liquidation agency for a group of financial institutions.
All right!
If you have to say it.
In fact, it is a joint allocation organization established by major financial groups and government agencies on the resource supply side.
The leaders were Tadayo Homma and Hiroshi Yoshimoto. When the issue of BCCI's bankruptcy and liquidation was mentioned, the people from the Banking Bureau of the Ministry of Finance and the Bank of Japan looked very unhappy.
The so-called BCCI, its full name is Bank of Credit and Commerce International - Tokyo Branch.
Headquartered in Luxembourg, its business scope covers the whole world.
However, since branches of foreign banks in Japan are not subject to Japan's deposit insurance system, the bankruptcy liquidation of the institution was carried out outside the deposit insurance system.
So all the major financial groups immediately gave up.
Honma asked for the research group's opinion.
Nakamura glanced at his nephew and said, "With the increase in real estate-related loans and the outrageous rise in land prices, land prices will definitely fall sooner or later. The same is true for BCCI's debt problem to a large extent, so my suggestion is to package these debts and liquidate them immediately, and repay the related debts of other institutions first to avoid involving more institutions."
Nagano took over the conversation: "Seriously, the housing price crash is largely the result of the decline in economic growth after the bubble burst. It was the discounted value of the tax benefits during the bubble economy that pushed up real estate prices. The crash also reflects the end of the tax benefits. So why not just separate BCCI's liabilities from the payment and settlement system?"
You make it sound so damn easy.
What should the depositors do? Everyone knows that Japanese life insurance is a bastard, and now another bastard has popped up, not only not helping, but also secretly mocking.
Honma Tadayo was very angry, but he could only say with a dark face: "Nagano-kun's suggestion is worth considering, but in terms of funding..."
Let us pay? No way!
“Isn’t it natural for the central bank to act as a lending bank of last resort and provide funds when necessary?”
"That being said, Nagano-kun, have you not noticed the criticism from the public? The public is wary of the moral hazard that may arise from the Bank of Japan's involvement in the bankruptcy of financial institutions. So."
In the "lender of last resort" theory in economics textbooks, the function of the central bank is purely to provide liquidity rather than credit funds.
That's why.
The public is very disgusted with the central bank's involvement in the bankruptcy of financial institutions.
Because any actions outside the rules are equivalent to the central bank paying for the actions of financial institutions that lead to bankruptcy.
But where the money comes from is a hotly debated issue.
First of all, it needs to be explained that the central bank and government agencies do not produce or create value, so the money to aid bankrupt institutions cannot come out of thin air.
Under the logic of general equivalents, this money will eventually become the bill that everyone pays for the bankruptcy of financial institutions.
That day.
The keywords "non-performing loans" and "non-performing assets" became hot topics in the four major newspapers.
Also on the same day, faced with the collapse of third-party deposit and lending institutions, the Banking Bureau had to announce that in order to maintain the stability of the financial system, the Bank of Japan would provide liquidity to financial institutions when necessary and perform the function of "lender of last resort."
The reason is that in reality, the typical scenario in which the function of the "lender of last resort" needs to be exercised is that if a financial institution that is temporarily in liquidity shortage is allowed to default, it will have a chain reaction on the entire financial system, that is, the outbreak of systemic risk.
When the Bank made this decision.
Ryutaro Hashimoto is having a headache over a report from a British newspaper on his desk.
The Financial Times reported that the scale of non-performing loans of Japanese financial institutions will reach 42 trillion to 53 trillion yen. The outside world now believes that this is alarmist. In fact, based on the non-performing loans currently monitored, it is far beyond this scale, reaching 100 trillion yen.
What's worse is that according to the deposit and loan data audited by the Postal Administration and major financial institutions, the private debt ratio, default rate and default rate have reached a critical point in financial history.
Right now.
A bar in Ginza.
I don’t know who released what Ryutaro Hashimoto said in the conference room.
There are complaints about him everywhere.
Iue Ryouta drank a few glasses and couldn't help but mutter, "This Minister of Finance is indeed a close relative of you, a straight man!"
"Hey! What are you talking about? What's wrong with close relatives? Besides, they are just old ladies."
"You can even say that you can buy a car and drive a taxi with low income. Don't you know that driving a taxi is very hard?"
"What? Iue, why do you always focus on something so strange?"
"Isn't it? Although driving a taxi can bring in 700,000 or 800,000 yuan a month, you have to pay for the annuity yourself, which is a huge expense. And working day and night every day is very harmful to your body. Have these been calculated into the profit and loss ratio?"
"What kind of messed up values are these! Even I only have an income of 700,000 or 800,000 a month. Is there a problem with that?"
Sato Takeru couldn't stand it any longer and said exaggeratedly, "Wow! You are worthy of being called a low-energy, immature child of the Mita Association for being able to say such shameless things! You have to make 700,000 or 800,000 a month. Not to mention those messy things, at least you can travel around the world several times a day, and you have a love allowance and a wife allowance. But ordinary people make 700,000 or 800,000, and annuities account for 100,000. If you travel several times a year, it will cost a lot of money. Calculate the communication fees, medical expenses, etc. Why don't you say anything?"
“.”
These words left Nagano Nao speechless.
I kind of understand why Koizumi couldn't fight back at that time.
What is habit?
In this bubble era.
It is not enough to just satisfy the needs of eating, drinking, defecating, urinating and sleeping.
Hey, hey, we work so hard, can't we go out and travel to relax and see the outside world? Is it just an out-of-season luxury item that ordinary people can't have?
desire.
Endless.
Accustomed to luxurious enjoyment.
Who would only consider the satisfaction of eating and sleeping?
At least there should be some spiritual nourishment! "You guys are typical of being unsatisfied. You just work part-time at a convenience store and you can buy a car in ten months."
"The best mobile phone can be bought with one month's salary."
“Even a luxury item like a computer only costs one month’s salary.”
"The value of such labor is still fickle, and you are full of resentment. Has your conscience been eaten by dogs?"
Drinking wine.
Nagano Nao couldn't help but speak out his true feelings.
Iue Ryouta rolled his eyes and said, "As expected, there will be a story where a dragon slayer becomes a dragon! This is not what you said when you humbly asked me to borrow money."
"Oh! Am I wrong? Seriously speaking, this kind of life is already pretty good. Even the laziest guy can easily make 300,000 yen a month, which is enough to buy a mobile phone!"
"Don't you think it's shameless to say such things? Why do you guys make tens of millions for a meal, and even get invoices, while we can only make a few hundred thousand yen a month? Please look at what this country has become. If it's really as easy as you say, why has the birth rate dropped to this point? It's because housing prices are too high and no one can afford to get married!"
"Brother, low housing prices are not conducive to young people's struggle! Don't complain about society all day long. Besides, housing prices in Shimane Prefecture and Hokkaido have fallen to 100,000 yen per stack. You can easily buy three stacks of five square meters of permanent property rights and actual living area in a month. Is this expensive? So, don't make excuses for your laziness! As a young person, please show a hundred times more passion and make progress for this country!"
"You bastard straight man! Don't you think it's easy for you to talk without any pain? Do you guys define the meaning of our lives as ants looking for a doghouse?"
Bang! Bang! Puff! Nagano Nao was beaten up by others.
Wait until you are tired of fighting.
The three of them lay on the ground, staring blankly at the ceiling of the private room.
Sato Kenichi cursed: "This is truly a capitalist country!"
"Isn't this very Japanese?" Iue Ryouta complained in dissatisfaction.
Nao Nagano said disdainfully: "If there is no selling, there will be no killing! To put it bluntly, it is all because of the bad nature of human beings."
"But you bastards are going too far! You want to deprive us of our privacy? It's fine if you enjoy the lavish food, but we didn't steal your cake. Why do you want to steal our bread and kick us in the mud?"
"Sato-kun, please reflect on what you said! We created the world and support you parasites. If you are not satisfied, why don't you resign?"
"Hey, hey, hey! Stop arguing. I feel like Miss Mikami is in love with me."
"What? Iuue, you're not going to be a bootlicker anymore, are you?"
"That's my plan! But I found that the meaning of life is to find something I enjoy. In fact, the days I spent with Miss Mikami are quite fulfilling. If I don't even have such a life, I can only go home to inherit the family property and become a damn capitalist!"
"Iue Ryouta, are you showing off, you bastard?"
"I'm serious! Forget it, Sato, you won't understand. You are not a fish, so how can you know the joy of a fish? You are not me, so how can you understand what that feeling is like!"
Iue Ryouta staggered away.
Nagano Nao was very puzzled and asked: "Can eating shit be addictive?"
"That should be it!" Sato Kenichi nodded seriously, "At least, Xiao San really likes it and goes to eat Golden Grain Meal once a week. It makes me want to try it out!"
"What?"
"Ah, it's okay! It's just that Xiao San wants to talk to you recently. What do you think?"
Two months ago.
A Japanese political figure has died.
And this person's background is very similar to Nagano Nao's.
Because of his illegitimate status, in order to get ahead, he married Kishi Nobuyuki's daughter, Kishi Nobuyoko, and reached a gentleman's agreement that one of the children born must inherit Kishi Nobuyuki's surname.
This is a very shameful thing.
What's even more shameful is that this guy has long been overshadowed by his father-in-law and has a very low status at home. When taking a photo, the rest of the family are sitting, but he is the only one who can only stand.
This person is——Ampere Jin Tailang!
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