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Negative rates, fat margins: Japan regional banks ramp up car, holiday loans

14 Comments
By Taiga Uranaka

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14 Comments
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Man, subprime is playing with fire. It is ok for part of your port, but to have it over 1/3 is not safe. If I were in a small bank here, I'd do reg loans, some personal loans, and plow profits into well run foreign banks like WFC or NYC. That are well run and have great efficiency rations. Esp with the yen being so high. That is a better way to survive than sub prime loans.

2 ( +3 / -1 )

Abe is fueling a potential financial bubble here. The real issue is people with cash -where are they to invest? Certainly not Japan with those low interest rates. What about the pensioners who need the interest money.

=A big +++ for money speculators. =expect more volatility. Investment in a stock bubble.

1 ( +2 / -1 )

Creating such a huge loan market is Abe's way of buying votes. Impoverished Japanese can not get a million yen with a phone call.

1 ( +3 / -2 )

holiday loan? Such a weird concept. Why would you put yourself in debt for holiday gifts?

10 ( +11 / -1 )

"subprime is playing with fire."

Not the same thing. The subprime cowboys were making crazy loans in order to sell them to Wall Street, which then sold securitized versions of them to other financial institutions. Also, those loans were for real estate.

These loans are more reminescent of the "Reagan boom," when credit restrictions were eased and American consumers went on a shopping spree, while shouldering record-high debt levels.

2 ( +3 / -1 )

The subprime cowboys were making crazy loans in order to sell them to Wall Street, which then sold securitized versions of them to other financial institutions. Also, those loans were for real estate.

Most of these loans were originally Aaa, Aa, A. (Moody's) -Nothing "crazy" or sub-prime about that. Were backed by junk/non-existent/no-title/overpriced (bubble) real estate. =It worked in Japan so the scam will work in the U.S. (and it did). US has a growing population that helps real-estate compared to Japan's declining population.

Many banks make insurance money off these title scams also -not just Goldman Sachs, vulture capitalists, hedge funds. -For the rich this sort of speculation/volatility is big money. You can make more, quick money in a volatile market and certainly the low interest rates help these folks also. Imagine if you could borrow private Federal Reserve money at less than 1%.

1 ( +2 / -1 )

Consumer debt: another great idea crosses the Pacific.

6 ( +6 / -0 )

Don't borrow, people! Debt is a mind-crushing thing. Be independent. Step away from consumerism and take care of your own, even if you have to drive a ten year-old car. At least it's paid for. Keeping up with the Taharas makes no sense.

6 ( +7 / -1 )

TrevorPeaceMar. 14, 2016 - 10:37AM JST

Don't borrow, people! Debt is a mind-crushing thing. Be independent. Step away from consumerism and take care of your own, even if you have to drive a ten year-old car. At least it's paid for. Keeping up with the Taharas makes no sense.<

Best advice I have read here for a long time! Live within your means, don't make the fat cats even fatter.

5 ( +5 / -0 )

15% for a million yen loan? When the banks are paying the BOJ to keep their money, it smells like a ripoff to me.....

0 ( +1 / -1 )

A lot of the banks are sitting on piles of deposits which they need to do something with. Japanese government bonds pay less than they used to. Consumer lending is an obvious area to try and expand your business if you are a Japanese bank.

1 ( +1 / -0 )

15% for a million yen loan? When the banks are paying the BOJ to keep their money, it smells like a ripoff to me.....

Welcome to capitalism

-1 ( +1 / -2 )

>Don't borrow, people! Debt is a mind-crushing thing. Be independent. 

We got a house loan last week @ 0.8.We're ponying up most of the money for the house and being self-employed, we are independent.Having paid up to ju-ni man rent for 20 years in our previous two abodes,it's nice to feel the financial relief that we'll get. The time is right if you've saved ahead.There'll never be interest rates at this low ever again.

1 ( +2 / -1 )

even if you have to drive a ten year-old car. exactly buying a new car is just a money pit, lose almost half its valve in 3-4 years makes for a big loss of cash. I bought a 9 year old car from auction with 50,000km . Looks like the last owner just kept it in the garage for use on weekends, it didnt have a scratch on it in fact it was in better condition than vehicles 3-4 yrs old. Over 4 million yen when new, got it for 350,000. man you gotta love Japan and the quality of used cars

1 ( +1 / -0 )

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