Effect of Japan's postal privatisation limited - Moody's |
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Tue, 23 Oct 2007 10:30
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MUMBAI (Thomson Financial) - Moody's Investors Service said the conversion of the Japan postal savings system to Japan Post Bank (JPB) -- essentially making it a fourth megabank -- will pose diverse potentially systemic and regulatory challenges, but should not pose a danger to the Japanese financial system or the government bond market.With assets of 232 trln yen and deposits of 187 trln yen as of March 2007, the Japan Post Bank is larger than any of the Japanese megabanks, Moody's said in a report. It has been positioned as a source of loan funds and as a large absorber of Japanese government bonds (JGB), in line with Japan Post Insurance (JPI).Given the scale of and the concentration to the JGB investment allocation, Japan Post Bank will face unique and unparalleled risk management challenges. However, internal institutional constraints and the government's gradually decreasing ownership suggest that the new bank will continue to invest heavily in JGBs, regional government bonds and Zaito agency bonds, and only gradually diversify its portfolio and seek higher returns either in private sector securities in Japan or elsewhere, including foreign bonds, Moody's said.Thus, any negative effects of downsizing the JGB portfolio and diversifying into other investment instruments are likely to be limited, particularly if liquidity management is emphasized. The process will necessarily be very gradual in view of JPB's immense scale. Therefore, the immediate and direct impact on the banking system will be limited, Moody's said.TFN.newsdesk@thomson.comans/ranCOPYRIGHTCopyright Thomson Financial News Limited 2007. All rights reserved.The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.
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Japan Finance Corp for Municipal Enterprises rated 'Aaa' - Moody's 