Chapter 271 The Collapse of the Financial Building

On December 15, 1990, the biggest financial crisis showed its signs.

The Bank for International Settlements is an international consultation body that stipulates that banks must maintain a minimum "own capital ratio" of 8% for financing.

In other words, to lend 100 yen, you must have at least 8 yen of your own funds as support. If bank capital is too small, international financing capabilities will be limited.

In the early 1980s, Japan entered the bubble economy era due to the Plaza Accord. When the world's major banks gathered at the Bank for International Settlements to reach a consensus, Japanese banks sought special treatment.

Because stocks rise and fall sharply, shares are not recognized as owned capital in foreign countries. Some countries, such as the United States, do not even allow banks to hold shares.

But in Japan, as part of the "stable shareholder" system, banks hold huge shares in many companies.

Therefore, at the meeting to formulate the regulations of the Bank for International Settlements, only Japanese banks in the world recognized the inclusion of shares in their own capital.

This incident became a trigger after the stock market crashed. However, with the full intervention of the previous Prime Minister Toshiki Kaifu and the new Prime Minister Miyazawa Kiichi, the impact of the stock market on banks' own capital has always been suppressed.

However, on this day, as major banks successively experienced uncontrollable internal corruption and external bad debt problems, the most terrifying thing happened unexpectedly.

The proportion of free capital held by Japan's major banks suddenly dropped below 8%, and continues to exceed the lowest value. This cannot be concealed and is irreversible.

Almost immediately, the Ministry of Finance and the Bank of Japan ordered securities companies, insurance companies, and pension fund companies to buy stocks to forcibly lift the stock market and prevent the banks' own capital ratio from falling to one due to the sharp drop in stock prices. Numerical values ​​that are hard to look at.

Previously, the purpose of calculating stock capital into self-owned capital was to increase the proportion of self-owned capital. Unexpectedly, this operation became the last straw that bound them, or even broke their camel's back!

The major non-bank financial institutions that had to actively respond were miserable and had no choice but to invest in large quantities of stocks in the hope of reviving the collapsed stock market.

What is shocking is that Shanyi Securities, as the main force in this rescue force, was exposed to a shocking financial scandal while investing——

Yamaichi Securities, which seemed prosperous and was still on the National Assembly's special financial support list after the bubble economy burst, was actually heavily in debt!

It also committed a large number of illegal acts. The main point was that Shanyi Securities deliberately concealed some of its debts, and the club had "off-book debts" that could not be seen in the accounting books.

The person who exposed this matter was Nippon Television, which was kicked out of the top five television stations by the Ministry of Internal Affairs and Communications. The Yomiuri Shimbun Group recently announced that it had sold Nippon Television to Kitahara Investment for a total price of 388.8 billion yen. It has now been placed under Under Beiyuan Entertainment, it was renamed Beiyuan Interactive Entertainment TV Station.

As soon as Kitahara Interactive Entertainment was established, Kitahara Sosuke recalled Ishida Tadashi, who had been exiled before, and asked him to re-serve as the station director. The first major thing Ishida Tadashi did after taking office was to expose the internal scandal of Yamaichi Securities!

Beihara Interactive Entertainment has great influence, because the previous live broadcast of the Tokyo Trial made the public have a good impression of it. Once the news was broadcast, although it was stopped as soon as possible, the issue had already spread among the public.

Under pressure, the Securities Bureau of the Ministry of Finance began to investigate Yamaichi Securities.

At 9 a.m. on December 15, according to Japan’s Ministry of Finance Securities Bureau, the amount of this part of “off-book debt” concealed by Yamaichi Securities was approximately 3.5 trillion yen, and the exact amount is subject to further investigation.

Concealing debts is a clear violation of the Securities and Exchange Act, and public opinion is currently focusing on this issue and is attacking it hard.

According to the "Kitahara Shimbun" report, the "off-book debt" problem of Yamaichi Securities emerged shortly after the Plaza Accord, and Nagano Poshi, director of the Ministry of Finance Securities, also admitted that he had "heard about it for a long time."

This bolt from the blue has completely confused the Ministry of Finance and the Bank of Japan.

Hidden debt of up to 3.5 trillion yen!

Yamaichi Securities is currently the largest securities trading company in Japan. Investors’ assets in Yamaichi Securities are as high as 24 trillion yen. Yamaichi Securities has 28 financial subsidiaries and affiliated companies in major countries such as the United States. It is extremely well-known and has huge transaction volume!

If something happens to it, it means that the entire securities industry will not be at peace.

Sure enough, those securities, insurance, and fund annuity clubs that were forced to bail out were exposed to similar scandals one by one, and the exposers were all reporters and writers under Beiyuan Interactive Entertainment.

This is a deliberate counterattack by Kitahara Sosuke. As one of his most loyal subordinates, Ishida Tadashi has long wanted to fight back against the bastards who exiled him, and he can repay Kitahara Sosuke for his kindness!

He worked hard to do these things, and added new bombshell news when the pressure of public opinion was the greatest and the discussion was the most heated.

Kitahara Interactive Entertainment pointed out that both the Ministry of Finance and the Bank of Japan have established inspection and supervision systems for securities companies to prevent illegal activities by securities companies.

In the past few years, the Ministry of Finance and the Bank of Japan have repeatedly inspected Yamaichi Securities, and they have also conducted multiple internal screenings. However, Yamaichi Securities' illegal activities "escaped" the eyes of financial supervisory agencies.

"Kitahara Shimbun" pointed out in an editorial: Japan's financial inspection is in name only, and the Ministry of Finance has a heavy responsibility!

In addition, Yamaichi Securities, which has such huge financial problems, was selected into the Congress's special financial support list, while Kithara Investment, which is thriving and moving against the trend, was excluded. This makes people have to doubt the vision and approach of Congress and the government!

Holding a coffee cup, Kitahara Sosuke, who had just finished his daily meeting, was summoned to the small conference room for a temporary emergency meeting by Tao Taro, the president with a hurried and unfriendly expression, before he entered the office.

Participants in this meeting were all the core senior managers of the Kyoto Branch.

Kitahara Sosuke sat down. Opposite him, Sato Takashi, the director of the financing department, completely lost the arrogance and relaxation he had that day. His expression was serious, his body was trembling slightly, and he was muttering something in a low voice, a little nervous!

"Gentlemen, we will have a special video conference with the Bank of Japan soon." Tao Tarang said and turned on the TV.

Video interactive conferences did not exist in this era. Such emergency meetings were broadcast live on television and communicated over the phone.

On TV, at the Bank of Japan headquarters, a group of big bosses, headed by President Mie Noyasu, sat upright with solemn expressions and announced the convening of a temporary policy committee. All the senior managers of major banks participated in the meeting.

Mie Noyasu introduced the problems of Yamaichi Securities as quickly as possible, and then pointed out that its real liabilities may be as high as 5 trillion yen!

This data is staggeringly exaggerated, indicating that Shanyi Securities lost all profits and deposits, and also lost nearly one-fifth of the assets of all customers!

This amount of loss even exceeded the highest loss of a single force in the Gulf War. The 2 trillion Kitahara Sosuke brought back from the Gulf War was nothing compared to it.

Nowadays, Beiyuan Investment, which is quite large, only has total assets of about 4 trillion.

Hearing this, Kitahara Sosuke finally understood that the seriousness of the matter was countless times greater than he expected!

He asked Ishida Tadashi to poke a hole, but he didn't expect that the sky was broken!

"In order to avoid the bankruptcy of Yamaichi Securities causing various countries to increase the financing interest rates for Japanese financial institutions, and to avoid the impact and chaos caused by the collapse of Yamaichi Securities to the securities markets of various countries to the greatest extent, we have decided to let all banks help it and provide An unsecured, unlimited special financing loan to Shanyi Securities."

Mie Yeyasu said in a deep voice.