In Nagasaki, bank consolidation may expose flaws in economic rescue plans

By Leika Kihara and Takahiko Wada

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There are too many regional banks in Japan and many of them probably should merge. Each prefecture in Shikoku for example has 2 banks, so that's 8 banks for 3.8 million people in addition to the various credit unions that operate.

0 ( +3 / -3 )

Probably 10 banks would be enough for the whole country.

But Suga needs to vastly overhaul regulations to enable entrepreneurs to fire up new businesses to challenge the old stale ones. In with the new and out with the old - or else the old have to become new themselves but that’s not so easy in anti-change Japan.

0 ( +2 / -2 )

The Americanization of Japanese financial and banking systems.

6 ( +8 / -2 )

more banks = more competition

-2 ( +1 / -3 )

more banks = more competition

Judging from the interest rates they're offering on the money I have in my accounts, I don't think so. To receive 3 yen in interest when you have over a million yen in your account is insulting.

2 ( +2 / -0 )

Go to foreign banks for financial purposes. Then all business can truly grow.

-1 ( +0 / -1 )

more banks = more competition

The problem in Japan is that entities like banks were established by geographic boundaries. So while there are many banks, most of them act in their own little fiefdoms.

If there were fewer banks but more actual competition, it would be a good thing.

But a lack of demand for banking services suggests other problems need solving too.

2 ( +2 / -0 )

"I'm worried the new bank may pay less attention to Nagasaki," said Ryuji Kuon, owner of a boat tour firm. "There's no clear explanation on how the merger would help us."

Think Ryuji here is under some misguided belief that bank mergers are supposed to "help cutomers", its all about controlling costs and tryinv not to go belly up in declining market. Most of the regional banks are run by oyaji dinosaurs not aware its 2020 not 1920, example.. i still have an account with one of these " regional banks " I misguidedly opened when i first got here and the other day went there for a fairly standard procedure , after being told their branch cant do it and i have to go to the branch I originally opened the account, 45 minute drive away ( and which naturally closes at the super convenient time of 3pm ) i was given a phone number for said branch in case I got lost, when i mentioned a Google map printout might be better for people who still prefer bits of paper to smartphones, the answer given was...very sorry, our bank doesnt use Internet" . This is a true story in 2020.

3 ( +3 / -0 )

What good are bank mergers if not for cost cutting?

"The only way to survive in an economy with a shrinking population is to boost productivity," he said. "Given the huge challenges ahead, we, banks, decided to merge. Borrowers may need to consider doing so too."

Translation - don't expect them to save you or boost economic recovery

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Regional banks are “urged” by the central bank to lend extensively locally. Even when you assess your loan portfolio periodically to weigh it for risks, the central bank gives “guidance” so that almost everyone except the super toxic ones to get a free pass.

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If you are honest, you don’t need banks anymore at all in all those heavily shrinking regions. Those few young people who still need investment money can pick it up at the prefectural office on a single weekday’s afternoon and that little profit , if ever and any, like above pizza shop owner’s, can very easily deposited under the pillow. Stop the show and start to look at the reality, come on.

1 ( +1 / -0 )

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