Japan will not help the U.S. banks
Japan's top three banks are expected to resist a request to put up a total of $15 billion for a U.S.-led subprime rescue fund, a move that could further cloud prospects for the bailout plan, says Reuters:
"It could prove quite difficult for us to put up funds for this," said an executive at one of the megabanks, adding that he did not think the fund would be able to sell the commercial paper that would in theory be supported by Japanese credit lines.
"Logically, it just doesn't make sense for us."
And people here are not forgetting a certain arrogance only a few years ago: "What did America do when we had our non-performing loan problem? They just pushed us into the corner. European banks also ran away. Why should Japan now shoulder this burden?" said one megabank executive.
Hat tip to Robert over at Pure Land Mountain, a blogger I like a lot, who further rubs it in by making the point that if this were you or me asking for money on such terms we'd be laughed out of the bank...
Martin Wolf at Financial Times helped me understand the current mess in his analysis, Why the credit squeeze is a turning point for the world
And lets not forget what happened the Northern Rock, the Scottish bank, earlier this year: The day panic came to the high street
IT BEGAN at 8am with a handful of pensioners huddled in the doorway and grew into a snaking queue of panic-stricken customers who feared they would never see their savings again. By the evening, the stampede to withdraw cash from Northern Rock had joined the fuel crisis and the three-day-week as a symbol of national economic woe. This was the day Britain's decade of cheap credit came to an end...
(I haven't seen people lining up yet outside their bank here in Japan - does it mean my savings are ok?)
By the way, does anyone care to guess which are in fact Japan's top three banks? And does ordinary people in the United States or Europe know the names of these institutions? And, remind me, who do we blame for our ignorance...?