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Land Of The Rising Bail In: Deposit Confiscation Coming To Japan Next
Posted By yihan On June 12, 2013 @ 5:15 am In Money Watch | Comments Disabled
June 12, 2013
We now know that ‘muddle through’ is over , and just as we noted here “there may only be painful ways out of this crisis” as we evidenced by Europe’s attack on Cypriot depositors . With the pillars of Abenomics starting to crumble , it seems plans are afoot to prepare for the bank failures that will come from a BoJ-inspired out-of-control bond market.
As Nikkei reports , Japan’s Financial Services Agency will enact new rules that will forced failed bank losses on investors, if needed, via a mechanism known as a “bail-in.”
The FSA report also notes that Mitsubishi UFJ (MTU), Mizuho Financial (MFG) and Sumitomo Mitsui (SMFG) are among those proposing amendments to allow them to issue the types of preferred shares or subordinated bonds that would be used in such cases.
So not only will Japanese banks suffer VaR shock-driven needs  to reduce JGB holdings but a weaker deposit base will further exacerbate the delveraging.
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URL to article: http://www.prisonplanet.com/land-of-the-rising-bail-in-deposit-confiscation-coming-to-japan-next.html
URLs in this post:
 ‘muddle through’ is over: http://www.zerohedge.com/news/muddle-through-has-failed-bcg-says-there-may-be-only-painful-ways-out-crisis
 Europe’s attack on Cypriot depositors: http://www.zerohedge.com/news/2013-04-02/visualizing-cypriot-deposit-confiscation
 pillars of Abenomics starting to crumble: http://www.zerohedge.com/news/2013-06-08/richard-koo-honeymoon-abenomics-over
 Nikkei reports: http://finance.yahoo.com/news/japan-adopt-bail-ins-force-181947896.html
 VaR shock-driven needs: http://www.zerohedge.com/news/2013-05-19/toyota-pulls-bond-deal-due-soaring-yields-japanese-var-shock-feedback-loop-back
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