[IWAR] JAPAN bank disclosure standards

From: Michael Wilson (MWILSON/0005514706at_private)
Date: Thu Jan 15 1998 - 11:04:28 PST

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    Bankers adopt U.S.-style disclosure rules for bad loans
       The Federation of Bankers Associations of Japan adopted on Tuesday
       stricter disclosure standards on banks' bad loans, modeled on U.S.
       Under the new rules, for example, banks will be obliged to release their
       figures for nonperforming loans if the borrower does not pay interest
       for three months or longer, instead of the previous six months.
       The federation added two categories for nonperforming loans: loans for
       which the principal repayments or interest are overdue by three months
       or longer and loans for which the interest is either reduced to above
       the official discount rate or whose repayment has been postponed, both
       as a way to help reconstruct borrower firms.
       Details about the new standards have yet to be agreed on, a federation
       official said, adding that individual banks may adopt new disclosure
       standards at their end-of-term settlement of accounts in March. Some
       banks will use the new standards in their reports for the business year
       that closes on March 31.
       At present, all member banks disclose their bad loans in four
       categories: loans to failed firms; those overdue for six months or
       longer; those to firms that the bank is helping reconstruct; and those
       with interest reduced to or below the official discount rate.
       In setting new categories, the federation aims to introduce disclosure
       standards that are close to those in the United States, an official
       said. There is widespread distrust among the public over the amount of
       nonperforming loans that banks admit to.
       On Monday, the Finance Ministry said major and regional banks estimate
       they have accumulated 76.71 trillion yen in potentially sour loans. The
       amount was tallied from self-assessment conducted by the individual
       banks and does not reflect nonperforming loans as of a set date.
       Copyright ) 1998, The Japan Times

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