Indonesia may make same mistake as Japan
Article Abstract:
Plans by the Indonesian government to prop up its ailing banks by issuing them up to 300 trillion rupiah in new government bonds could hurt more than it could help the country's bond market. Indonesia should try to learn from Japan's recapitalization experience, where interest rates rose due to the purchase of government bond issues. Although the effect of such a move will not be readily apparent, interest rates could escalate if the banks try to sell the bonds. However, if the central bank decides to buy the bonds and keep interest rates minimal, money supply could vastly increase and overwhelm Jakarta's already-ailing economy.
Publication Name: The Asian Wall Street Journal Weekly
Subject: Business, international
ISSN: 0191-0132
Year: 1999
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Banks await public funding
Article Abstract:
Japan's 15 largest banks have officially requested from the government 7.5 trillion yen ($62 billion) in public money to clear their balance sheets of problem loans and ease the nation's banking crisis. The Financial Reconstruction Commission has already informally approved the public fund infusion but a formal approval will soon follow. The banks have also passed their restructuring plans which the commission will use in finalizing terms on subordinated loans and bonds and preferred shares.
Publication Name: The Asian Wall Street Journal Weekly
Subject: Business, international
ISSN: 0191-0132
Year: 1999
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Are the country's impoverished borrowing too cheaply? Fundamental financial difficulties threaten the future of Vietnam's Bank for the Poor
Article Abstract:
The World Bank has offered a loan of $15 M to revive the Vietnam Bank for the Poor which is experiencing financial troubles. The state-owned bank was formed in 1995 to service the poor which composes 1/2 of Vietnam's total population. One condition for the loan, however, is to change the bank's operations to generate profits. Bank for the Poor charges only 1% per month on loans while other commercial banks charge 1.5% and it does not bother to track nonperforming loans.
Publication Name: The Asian Wall Street Journal Weekly
Subject: Business, international
ISSN: 0191-0132
Year: 1997
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