(April 10 – 17:40 ET) – The Japanese government recently announced an emergency economic package, including a stock-purchasing entity funded by public money. It also introduced an outline to limit bank exposure to certain troubled borrowers. Banks will be required to write down such high-risk loans within a few years.

Moody’s Investors Service says it’s too soon to conclude if the schemes presented in the package will lead to the banking system’s fundamental recovery. As a result, the impact of the scheme on Japanese bank ratings is limited.

Moody’s points out that the banks may require much larger government support than the plan outlines, due to the banking sector’s limited ability to generate resources internally.
-IE Staff