Fred B. Moseley (fmoseley@mtholyoke.edu)
Mon, 18 Oct 1999 19:15:38 -0400 (EDT)
Makoto,
Thank you very much for your response to my earlier post. I appreciate
your confirmation of my understanding of the chapter from your book.
I look forward very much to reading the book when it comes out.
Your latest post seems more pessimistic than your earlier ones. Or maybe
I misunderstood what you meant when you said earlier that "Japanese banks
feel safer now." Maybe they feel safer because they are now more able to
satisfy capital adequacy requirements (in somewhat dubious fashion). But
they still have a huge problem with bad loans, mostly involving real
estate and construction in some way, which seems to show no signs of
lessening. And it seems highly unlikely that Japanese banks will begin
lending to the pivate sector again anytime soon, without which the
Japanese banking crisis will not be over and the chances of a sustainable
recovery of the Japanese economy will not be very good.
The question then becomes what will the effects of continued recession in
the Japanese economy on the rest of Asia and on the rest of the world,
including the US.
I would be very interested in any further comments that Makoto or anyone
else might make on these questions.
Thank you again for the illuminating discussion.
Comradely,
Fred
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