Chapter 468: The Bold Financial Industry
The reason why Japan was in a nationwide frenzy in 1988 was not only because the continuous rise of the stock market and the real estate market brought huge profits to people.
In addition, the turbulence in the international environment has also given the Japanese people the illusion that they are the center of the world.
Due to high unemployment and the democratization of Eastern Europe, social order in Au Chau is unstable.
The United States' continued fiscal deficit, housing financial crisis, social credit crisis, etc. continue to rise.
Coupled with the confrontation between the United States and the Soviet Union, it can be said that the entire world situation seems to be on the brink of collapse at any time.
But looking at Japan, the economic and political situation is relatively stable. Coupled with the dividends of previous economic development, it can be said that the lives of Japanese people are indeed getting better and better.
Now the golden age has begun. Look at the situation abroad and then compare it with the situation in China.
Then the slogan "Japan No. 1" resounded throughout Neon, and everyone believed that the era belonging to "Neon" had arrived.
This is why there was this scene where Hideo Kojima and his friends were drinking in the port area at night.
Even though Akagi seems to be lavish and doesn't care about the cost of dinner, it doesn't mean that he is getting carried away.
But in this era, people really drink foreign red wine like boiled water.
Since the appreciation of the Japanese yen, foreign luxury goods have become mass consumer goods in Japan.
Red wine, French cuisine, and Western handicrafts have all become items that people can consume at will.
Although Baichuan Feng knew that such a luxurious lifestyle would not last long, he had no way to convince people to change this style.
He did not interfere too much even with the people around him or the employees of Baichuan Holdings.
The social environment is like this, and individual will has no effect at all in front of it.
So when other companies were offering generous benefits to their employees, Shirakawa Holdings could only go with the flow.
Otherwise, if others are enjoying wine and golf while they themselves are living a poor life, wouldn't the employees of Baichuan Holdings have any thoughts?
Don't forget that there is a war for talent all over Japan right now. If Baichuan Feng persists in his previous behavior, it is estimated that all the people in Baichuan Holdings will run away soon.
Therefore, Baichuan Holdings is also issuing subsidies of hundreds of thousands or millions of dollars, and some are even more excessive than its peers.
Since making a fortune from the Plaza Accord, White Holdings has also been making quick money in the foreign exchange market and stock market in the following years.
Although this money is not much, it is enough to provide benefits to employees.
Just think of it as temporary expenses to attract talent and stabilize the company.
It won’t be for a few years anyway , and Baichuan Holdings can afford this amount of money.
Under the influence of the social environment, the employees of Shirakawa Holdings are just one of the countless people.
It was their personal choice to enjoy themselves during the bubble era, and there was no need for Shirakawa Kaede to restrict them.
However, on some things, he cannot let his business go with the flow.
For example, all banks, financial institutions and private institutions in Japan are lending without restraint.
So can Kitato Bank follow the crowd and do the same? Of course not!
"Mr. Arai, Kitato Bank is still sticking to its original bottom line when it comes to lending.
Unless there are sufficient collateral assets, lending limits will be tightened.”
"Currently, the main recipients of Beidu Bank's loans are medium and large enterprises, whose loan amounts account for more than 60% of Beidu Bank's total loan amounts.
In addition, there are loans to small and medium-sized enterprises and personal loans. Their loan review is the most stringent, and unsecured loan applications are almost never approved. "
"Very good. Don't relax the supervision in this area for the time being. The stock market and property market are too hot right now."
"Hai" Arai Yu could understand what Shirakawa Kaede meant when he said it was too hot.
To be honest, in his entire life, he had never seen a scene like this before.
While feeling uneasy, Arai Yu was also extremely envious of his peers who were making huge profits .
However, since Baichuan Feng insisted on the contraction strategy, he had no choice but to execute it.
"Arai-san, are you wondering why Kitato Bank doesn't lend money as much as other banks?"
As if seeing his confusion, Baichuan Feng naturally started talking to him about this topic.
"Is President Shirakawa worried about any ups and downs in the stock and property markets?"
Anyone with a discerning eye knows that most of Neon Bank’s money now flows to these two places.
Arai Yu is in charge of the bank, and he knows this best.
If Shirakawa Kaede is worried that Kitato Bank's loans will become bad debts, then the culprit must be the stock market and the property market.
In response to Arai Yu's answer, Shirakawa Kaede nodded in approval.
"Arai-san, do you remember the industry report we read together last time?"
Arai Yu's face changed. The annual banking industry report will be professionally interpreted by Kitato Bank in the spring of next year.
This report includes not only the financial reports of Kitato Bank itself, but also those released by other Japanese banks, as well as data reports from large financial institutions.
"Last year alone, Japan's top 12 banks lent a total of 40 trillion yen to the real estate industry.
This amount accounts for a quarter of the total loan amount, or 25%.
Real estate loans account for 25% of all industries in Japan, which is too high.
In addition to unrestrained lending, almost all banks are secretly increasing leverage ratios to increase profits.
A quick search will reveal that these banks have most likely violated the Basel Accord of the Bank for International Settlements.
They lend out the unrealized profits of shareholders as capital, which causes the amount of money in circulation to further expand.
These are only the top twelve banks for which statistics are available; other small banks and special banks are not included.
In addition, let's look at those private financial institutions. In order to compete for profits and share the market, thousands of non-bank institutions such as financial companies and investment companies are also secretly lending to the public regardless of policy restrictions.
They have no supervision and no restrictions. Even minors are allowed to borrow 5 million yen without collateral, which is unbelievable.”
This is a real thing happening in society at this time and has almost become the norm for money lenders.
Because hot money has flowed into the stock market and the property market, banks have also opened the door to make it easier for people to provide loans for real estate speculation.
At this time, not only the public, but even banks felt that land prices would not fall. Assets mortgaged with real estate were good assets, so banks were confident in lending.
Because everyone is speculating in real estate, banks have won a large number of loan businesses. Although the interest rate is low, it is still a profit.
Moreover, many real estate speculators sold their houses in a short period of time in exchange for a large amount of funds, and the bank's debts would also be repaid at this time.
Therefore, stimulated by short-term and long-term profits, many financial companies and investment companies began to raise funds and lend money.
Their interest rates are higher than those of banks, but their advantage is that their review process is more relaxed. They even lend money to minors, so what else would they not dare to do?
Due to the chaos in the financial market, many so-called financial companies and investment companies are actually controlled by the underworld.
They transformed the loan sharking that used to be hidden in the dark into today's financial companies, and then openly lent money to the public.
It's magical, right? The bubble economy caused the underworld that used to hide in the dark to begin transforming into formal companies.
The benefits are tempting. Who would be willing to do those disgusting things when they can make money in an honest way?
According to statistics from Kitato Bank, these numerous private institutions have lent at least 30 trillion yen to the real estate market.
Many of these large companies are also secretly engaged in loan business, or directly enter the market to speculate in real estate and stocks.
In short, the amount of loans in Japan's real estate market is as high as 70 trillion yen, accounting for about 80% of the national GDP.
Is this a high percentage? Just look at the United States, where the figure is 33%.
Such data from the United States has subtly exposed the financial crisis in the real estate sector.
So it’s easy to tell that the real estate market in Japan is very abnormal at this time.
However, the fact is that this is not the end of the madness. It is only 1988, and there are still two or three years away from the peak in 1990 and 1991.
After listening to Shirakawa Kaede's analysis, Arai Yuya slowly calmed down.
Previously, he was also confused by the hot real estate market and believed that Kitato Bank's contractionary policy would cause him to miss out on a huge profit.
After all, major banks such as Bank of Japan, Fuji, Mitsui, Mitsubishi, and Dai-ichi Kangyo Bank all do this, so it is normal for Arai Hiroyuki to have had such thoughts before.
"Mr. Baichuan, do you think we need to be more strict in reviewing real estate loans?"
For some reason, Arai Yu, who was originally full of confidence, suddenly became a little uneasy.
"That's not necessary. The people we lend to now are all medium and large companies. They are much better than ordinary people in terms of risk resistance and repayment ability."
Because these companies are large enough, even if they go bankrupt in the future, they will not collapse.
However, it is certain that there will be heavy losses, but as long as the money from Beidu Bank can be recovered, or there is substantial collateral, then there will be no major problem.
As for personal business, it accounts for a limited proportion within Beidu Bank, so there is no need to worry too much.
It is said that because Kitato Bank has strict audits on personal business, it has received many complaints from the public.
They use the unlimited nesting doll method with other banks and can get loans at will.
But after you have cheated once with Beidu Bank, it will be difficult to cheat again.
Although it has been complained by many people and even been labeled as a "stingy bank", Kitato Bank has not changed its strategy.
The explanation given to the outside world was that it was to ensure the bank's capital turnover, and everything else was just as if nothing had happened.
"Neon's GDP growth rate was only 5% in the past year, the lowest in recent years, but people are getting richer and richer.
Where does this money come from? From the stock market, from the property market, and from overdrafts from the future.
Alas, this is not a good sign." Bai Chuanfeng put down the information in his hand and sighed.
Because of the obstruction of manufacturing industry, Neon’s GDP growth rate dropped directly, but now good days are getting sweeter and sweeter.
All signs indicate that Japan's economy is somewhat abnormal now.
"President Shirakawa, then...should we remind others?" Arai Yu asked uncertainly.
"What are you reminding me of? Reminding others that Japan's economy is not normal?
Regardless of whether others believe you or not, do you think those chaebols really didn't notice anything?
Remember, Mr. Arai, if you don’t want to get into trouble, you have to learn to play dumb.
Otherwise, the chaebols would dare to do anything for the sake of profit."
Looking at Baichuan Feng's meaningful eyes, Arai Yu suddenly shuddered.
The real reason behind the soaring real estate and stock markets seems to be more than just the appreciation of the Japanese yen.
