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Battle Over Japan's Mortgage Market Raises Default Risks Sep 05
Standard & Poors, Sep 2005
Abstract
The bursting of Japan's bubble economy in the early 1990s triggered an economic slump that has sometimes been called the 'lost decade.' The Nikkei stock index declined by more than 70%, and commercial land prices in large cities fell 82% from their peak, creating stockpiles of nonperforming loans. Throughout the crisis, the mortgage market was comparatively stable, as fear of home repossession kept default rates relatively low. In recent years, as corporate borrowing has fallen off in the wake of companies' financial restructuring and growing disintermediation, Japanese banks have come to rely more heavily on housing loans, which offer relatively wide margins. Over the last three years, housing loans have surged to 23% of major banks' total lending from 16%....
Companies mentioned in this report are: UFJ Bank Ltd.,Sumitomo Trust & Banking Co. Ltd.,Mitsubishi UFJ Trust and Banking Corp.,Bank of Tokyo-Mitsubishi Ltd. ,UFJ Trust Bank Ltd.,Chuo Mitsui Trust & Banking Co. Ltd.,Mizuho Trust & Banking Co. Ltd.,Japan Housing Finance Agency,Sumitomo Mitsui Banking Corp.,Mizuho Bank Ltd.,Mizuho Corporate Bank Ltd.,Mitsubishi UFJ Financial Group Inc.,Resona Bank Ltd.,Sumitomo Mitsui Financial Group Inc.
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
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