When is a non-performing loan not a non-performing loan? When you say it isn’t! Bloomberg reports:
Oct. 6 (Bloomberg) — Japanese banks’ bad loans won’t be driven higher by a proposed moratorium on debt payments by struggling small companies, said Financial Services Minister Shizuka Kamei.
Lenders won’t have to classify loans encompassed by the plan as non-performing, Kamei, 72, said in an interview yesterday at his office in Tokyo. That means they won’t be forced to boost provisions when borrowers postpone repayments of interest or principal, he said. At the same time, Kamei vowed to push banks to extend more credit to small businesses after bankruptcies hit a six-year high in Japan.
“We’re going to get financial institutions to provide these firms with more loans,” said Kamei. “Banks won’t have to treat debt on which they provide a moratorium as bad.”
The Topix Banks Index has fallen 9.2 percent since Kamei, who has blamed“unbridled capitalism” for the global credit crisis, was appointed by Prime Minister Yukio Hatoyama on Sept. 16. Kamei’s plans may put pressure on large banks’ credit ratings, said Naoko Nemoto, managing director at Standard & Poor’s in Tokyo.
Why didn’t I think of this? Dang! I could’ve been President! Nobody’s unemployed — we just refuse to classify people who aren’t working as unemployed! They’re early retirees (at 19), or Buddhist monks, or hippies, or whatever. The unemployment rate is zero! And there aren’t any bankruptcies, just people who decided to seek enlightenment away from the business world.
