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Japan offers solution to US banking crisis

by grimgraphix / September 21, 2008 3:10 PM PDT

It is only four years ago that Japan's banking crisis seemed close to triggering a global recession.
Most of the big banks were in trouble and many seemed to be heading towards bankruptcy.
Given their wealth and global influence, it was often said that if one of the big Japanese banks went under, it would trigger a financial crisis that would spread around the world.
That did not happen, mainly because the Japanese banks purged their bad debts before they went out of business.
It was an expensive and painful process, but could provide a guide as to how America and Europe should respond to the current turmoil.

In the process of bailing out their banks... the Japanese fedwanted full disclosure of how serious the problem was and a promise from the banks not to let it happen again. When you think about it, much of the problem the US banking industry is facing right now is from hiding important financial information from the the world in an attempt to avoid an oncoming bullet. Doesn't this sound much like Enron, when it hid its' true financial situation from the rest of the world until it was too late?

Be that as it may, how much disclosure of records should we expect from our banking industry? If we don't demand full disclosure won't it allow these banks to go back to the same bad habits they practiced before?

Here is another interesting article that posted on the BBC at the beginning of August. How accurate was it ?

Monday, 4 August 2008
Credit crunch: The blame game
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I think full disclosure is mandatory in any bailout
by Ziks511 / September 21, 2008 9:53 PM PDT

And a clear tracing of whose fingers have been in the cookie jar before the bailout, and after. I'm the farthest thing from a conservative Republican you could find, but I want to nail the hides of the criminals who perpetrated this fraud to the barn door to warn away others of the species.

From what I understand of the resolution of the Japanese Banking crisis, it does seem like a good model.


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This makes absolutely no sense. How, exactly, do you think
by Kiddpeat / September 21, 2008 11:04 PM PDT

the banks are hiding a problem? Helloooo? Many are going down the tubes. What is it that you think they are hiding?

The problem here is that the government (i.e. Congress) created a MANDATE that the banks MUST lend to people who cannot repay the money. We are now learning that many, including the New York Times, warned that government policies could create this problem. Now, it is incumbunt on the government to help solve the problems it has created.

The main source of the problem is in the quasi-government agencies where social activists churned out these toxic loans while enriching themselves. Guess which Presidential candidate these people are now "advising"?

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"toxic loans "
by critic411 / September 22, 2008 4:51 AM PDT

I like that

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by JP Bill / September 22, 2008 4:46 AM PDT

We'll do whatever is necessary but Rejected? (You handle it?)

G7 pledges 'whatever needed' to aid markets

European and Japanese finance officials rejected U.S. Treasury Secretary Henry Paulson's plea to help rescue troubled banks, as the Group of Seven nations pledged to step up efforts to mitigate the financial crisis.

"We are ready to take whatever actions may be necessary, individually and collectively, to ensure the stability of the international financial system," the G-7 finance ministers and central bankers said in a joint statement after a conference call Monday. Specific policies weren't mentioned.

"None of the other six G-7 members will adopt a similar program to the U.S.," German Finance Minister Peer Steinbrueck told reporters in Berlin after the call.

The statement said the countries "strongly welcome the extraordinary actions taken by the United States to enhance the stability of financial markets and address credit concerns, especially through its plan to implement a program to remove illiquid assets that are destabilizing financial institutions."

That proposal earned a tepid response in G-7 capitals.

Prime Minister Stephen Harper said Monday that Canada did not face the same problems that prompted the Treasury's rescue plan.

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The credit problem enriched almost every American
by AFSLoansOnline / September 27, 2008 7:15 AM PDT
In reply to: Rejected?

The problem this country had giving out loans easily to enrich the economy enriched almost every American in the country, but now that it's time to pay the piper, it's only wall street or big banks CEO that made the money? How about every contractor on down to the county clerk?s office or how about the increases in City and State taxes because of the increase in home values during that era - who benefited from that money. Did they build new parks, build more bureaucracies and city and state paying jobs?

The congress isn't talking about that, because they don't want their constituents upset, even though almost every single constituent benefited. It was not just real estate and wall street, it was main street that was having a party with future expenses that we have to pay now! Not in two weeks but NOW! Every one of us is to blame, and everyone of us should pony up the money to bail out the lenders. My point is that a National Bail-out of sorts is not because a few benefited at the hands of many - but many benefited at the hands of many and now many must pay to fix it. Fair is Fair.

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