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Poor English saved Japanese bankers during 2008 crisis: Aso

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Sometimes ignorance IS bliss.

15 ( +16 / -1 )

bankers in Japan had not been able to understand the complex financial instruments that were the undoing of major global players, so had not bought them

Sorry, Japan. You're not unique in this one.

3 ( +5 / -2 )

Sounds... plausible?

5 ( +5 / -0 )

I seem to recall reading that Nomura Securities, MUFG, etc. did incur losses in 2008, but the losses were comparatively smaller than the US and European banks. So it was not as if Japan's institutions were immune.

2 ( +2 / -0 )

The real reason is that Japanese banks had a head start: they blew up back in 1991, aka "Yamaichi shock." They were more heavily regulated and a lot more risk adverse after that, i can tell you.

17 ( +18 / -1 )

Aso, who also serves as deputy prime minister, said bankers in Japan had not been able to understand the complex financial instruments that were the undoing of major global players, so had not bought them.

This bit is true, and the reason Japanese banks didn't buy, but not because of poor English. The maths just didn't add up and know one here knew what the fuss was all about. It's called Risk Management - most of the Japanese banks are largely risk averse.

US/EU banks saw a bandwagon, jumped on it and then got burned. Ooops, roll that back, they didn't get burned, they got bailed out. So where as the creditors and shareholders, and employees of the banks should have lost out, it was actually everybody else who ended up paying.

I seem to recall reading that Nomura Securities, MUFG, etc. did incur losses in 2008, @virtuoso - this is true, but the financial markets just dried up and trading volumes dwindled which caused most of the losses. There were some bad debt provisions made as well though.

11 ( +11 / -0 )

I have to agree No Miso, South African banks didn't buy these products either... but they all speak English. Bang goes the theory that it was caused by English.

Couldn't we just give Japanese Bankers credit for being a little less profit centered and a little more cautious than most banks?

17 ( +19 / -2 )

@Frungy

have to agree No Miso, South African banks didn't buy these products either... but they all speak English. Bang goes the theory that it was caused by English. Couldn't we just give Japanese Bankers credit for being a little less profit centered and a little more cautious than most banks?

The reality is probably somewhere in the middle of these causes; Japanese banks are less risk adverse (which also means they are likely to earn less as well remember), AND Japanese bankers are not confident in dealing in English so are relatively isolated from what goes on with banks in other countries.

-2 ( +2 / -4 )

Jeff Lee, correct. Japanese banks had their crisis a decade earlier, a colossal amount of tax money was poured in, and they were better regulated as a result.

5 ( +5 / -0 )

Hahaha...I'm afraid that doesn't help Japan so much.

0 ( +2 / -2 )

and this, of course, will help perpetuate the idea that English (therefore all things foreign) are evil or not to be trusted.

0 ( +10 / -10 )

@letsberealistic

The reality is probably somewhere in the middle of these causes; Japanese banks are less risk adverse (which also means they are likely to earn less as well remember)

The flipside to that coin is that they are also likely to lose less!

1 ( +1 / -0 )

I often send Japanese salespeople packing with a wide-eyed 'sorry?' from my front door. Not a bad idea even in the world of high finance. Better than having the ego of some bankers buying these instruments while being too proud to admit they didn't understand how they worked.

0 ( +1 / -1 )

The logical conclusion of Aso's argument is that if the Japanese bankers did not read any language at all, they'd be in even better shape.

9 ( +9 / -0 )

JAPANESE dont want to learn english.

-2 ( +3 / -6 )

JeffLee and No Miso are perfectly right. I heard this directly from my parents who work in banking. Snarky western analysts around 2005 were writing that Japanese banks aren't buying "modern financial investment instruments because they don't understand them" (in other words, I can't make big profits and bigger bonuses!") As No Miso says, Japanese banker's English was not the problem, the products were the problem. They didn't understand the products because the products themselves didn't make any sense. "There is no open market for the products, but just trust us about their value!" yeah, right! Plus as JeffLee says, they were risk adverse because of the meltdown of 1991. Mr. Aso needs to go back into his hole and stop bothering us.

10 ( +10 / -0 )

Zis izu ei pen. Zatto izu a kurejitto diifouruto suwappu.

2 ( +4 / -2 )

I just wish the Japanese banking system would modernize already. Perhaps the reason Japanese banking is so lo-tech ( e.g. no real internet banking) and old fashioned (still using bank books and faxes) is because they don't have the funds to invest maybe because they are so risk adverse.

-1 ( +3 / -4 )

Another cracker from Aso. I love this guy, seriously. The things he comes out with are as good as any of the so called comedians in this country.

5 ( +6 / -1 )

0 ( +0 / -0 )

Now now @Nessie. "Zis izu ei pen. Zatto izu a kurejitto diifouruto suwappu." I might just have to sue someone for using all this Japlish I do not understand. If my memory is correct, Canada wasn't affected as badly because they saw the dangers in buying those re-packaged loans and realized the risks involved.

3 ( +3 / -0 )

Well, halle-effing-lujah!

I don't believe this has a thing to do with English (which is at a pathetic level here anyway). It has to do with J-bankers being overly cautious like everyone else here. In this case, I guess they benefitted from this.

The attitude, however, of "ignorance is bliss" will hurt Japan in the long run. I don't believe it is possible any longer to go "full sakoku" and ignore what happens in the rest of the world. But whatever, really. Let the ignorant be blissful.

0 ( +1 / -1 )

the last time I checked, math doesn't require English. the investment bankers from the US and EU just ignored the math and went for profit.

3 ( +3 / -0 )

hoserfella at Jun. 29, 2013 - 05:14PM JST 'and this, of course, will help perpetuate the idea that English (therefore all things foreign) are evil or not to be trusted.'

From one gaijin devil to another you Hit the nail on the head there. Sad isn't it....

0 ( +3 / -3 )

I guess, bankers from all the other countries bought yen and it worked as a shield. It is not the language :)

0 ( +0 / -0 )

During the bubble, Merrill Lynch started doing subprime mortgage lending in Japan through local banks i.e. it took on the credit risk that the banks themselves were not happy to take on. Those banks were aware of what was going on and was happy to work with the foreign company to make loans as long as the foreign bank took on the risks.

Merrill Lynch effectively went bust in 2008 and was sold to Bank of America.

0 ( +0 / -0 )

Aso = Kaptain Klutz LOL!!!

0 ( +0 / -0 )

"the 2008 global credit crisis

This is the fault of gaikoku.

0 ( +0 / -0 )

Aso is simply perpetuating a stereotype. He seems to have absorbed stereotypes that foreigners have about Japanese. That is, that we cannot learn English. I guess that is the impression you get if you can't get out of your English teaching salon job.

1 ( +2 / -1 )

So, according to this article it was their lack of knowledge that saved them. That is some argument against learning. Actually any thinking person who was not run by greed and immediate profit would know that it was wrong to follow the scam that was propagated. Maybe it should read they were saved from their own greed because they did not understand. What this articles says is that they were saved because they did not know English and implies that if they knew English they would have followed their greed hence saying that all bankers are greedy and all would have followed if they understood that they could rape the people and make more money for themselves. The logic in this article if their is any logic is completely illogical.

0 ( +1 / -1 )

Old Taro made my day! Not to mention Nessie! Wakkannai, neee... Heheheeee

1 ( +1 / -0 )

this guy is the FINANCE minister. He seriously believes that Japanese bankers didn't understand the sub-prime loan crisis because of their English. Japan is in a lot of trouble.

2 ( +2 / -0 )

My personal experiences in that time period suggest that Mr Aso is talking out of his rear end again. Man never seems to quit.

0 ( +2 / -2 )

It helped then (accidentally) but lack of English knowledge is probably going to hurt later.

0 ( +1 / -1 )

Gokatei_wo_maneku I don't think anybody is say saying that Japanese can't "learn" English. The stereotype is that compared to other industrial countries, Japanese people do not speak English proficiently enough to function on the international stage. Of course there are many examples of Japanese that can, but generally speaking it is not the case. Obviously your English is superb but you are (obviously) an exception ... But are you saying that this "stereotype" has no basis? Just look at the fact that Japanese diplomats are often the only ones that are unable to function at international meets without interpreters.

1 ( +2 / -1 )

2008 was a bubble bursting. People buy bubble stuff on the way up with fake money. After a bubble bursts, everybody's broke and scared to touch anything.

As explained earlier by No Miso, Japan's bubble burst long ago.

But Japan's big crash is coming. You can bet on that. And no lack of English is going to help.

-1 ( +1 / -2 )

Btw, the idea that Japanese bankers didn't understand the 2008 sub prime due to poor English skills is ridiculous.

0 ( +1 / -1 )

Ridiculous, but very typical, when things get hot, use the old 'I dont speak English' trick. I ll try this with cops next time. I dont speak Japanese, see if they let me go.

1 ( +2 / -1 )

Nice try, Aso. Could the real reason have been your 1990's bubble bursting, mortgage/ real estate crisis predicated on inflated real estate that caused banks to fail all over Japan and there was no money to be had? You remember, the one where it was revealed your "economic miracle" was all on paper and was really one giant Ponzi scheme funded by Japan Inc?

0 ( +1 / -1 )

I still say the 2008 financial crisis was the fault of gaikoku.

1 ( +1 / -0 )

speaking English is very nice when you are selling something but when you are buying something then it is --------- you know, so nan desu ka

1 ( +1 / -0 )

Japanese banks are healthy, but that’s not true at all...

I'm sure that comment went over with those Japanese bank managers, like someone releasing a loud fart during a solemn religious service.

1 ( +1 / -0 )

So Japanese bankers didn't buy in to these "products" because they couldn't understand them?

Don't be so quick to blame their lack of English, most American and British bankers too didn't understand what they were buying, they just saw that it would make them money in the short term and that was all that they needed. After all, while Japanese people tend to stick to their job and enterprise, and so are in for the long haul, many American financial employees quickly change jobs, so they have incentives to highly favor the short term over the long term, because if they don't expect to be with the same company in 5 years, what do they care what will happen in 10 years because of their actions? They do the things that bring in the most money in the short term to get themselves big bonuses, then they bail out before everything blows up.

0 ( +0 / -0 )

I still say the 2008 financial crisis was the fault of gaikoku

Yeah, you're right, the US definitely had a big hand in it.

1 ( +1 / -0 )

Well, some of these bankers studied in US universities. It is easy to pretend you have poor English as an excuse.

2008? Word processors were available. In 2008, no way poor English is an excuse. They have interpreters and translators in banks, too.

0 ( +0 / -0 )

we're ignorant.......we survived because we're ignorant.................therefore, ignorant is good.

0 ( +1 / -1 )

Most of the top Japanese bankers spend 10 to 15 years living overseas as part of their career development (never see Americans do this). Their English, French, German, Chinese, or where ever they stayed, is great. They are not stupid people, and know the necessity of knowing a foreign language. And there is nothing like learning a language living in the country where it is spoken.

-1 ( +0 / -1 )

Advantages of not knowing English!

0 ( +0 / -0 )

Mitsubishi-Tokyo-UFJ bought 3.3 trillion yens worth of Freddie Mac and Fannie Mae bonds and Norinchukin bought 5.5 trillion of them. The latter has an asset management division with more than 300 MBA holders from top-tier schools of US. Aside from their English skills, they were actually, unlike the French, unaware that stupid Americans were doing something cunning and dishonest.

-1 ( +0 / -1 )

It has been tradition of Japanese banks to send their executives to USA, etc for their business. Remember Yoko Ono whose father of Yasuda banking system was in USA and Ono graduated Sara Laurence (sic) College in USA? Many Japanese banking executives have lengthy stay in USA bossing their American employees and many are fluent in English to begin. Remind you, Japanese school system has mandatory English classes since Jr,. HS, especially In Univ. Pretending that poor English worked well now., or so I guess.

0 ( +0 / -0 )

Seiharenokaze Not very classy I suggest you refrain from calling any nationality stupid....

-1 ( +0 / -1 )

ViennaSausage2 san,

Sorry, but the problem is the stupidity does not seem to end. QE money they provided for putting things in order after 2008 has been still used for reckless loans by Americans as well as for speculative money. Anyway we might brace ourselves for another result of something the clever people out there are scheming.

-1 ( +0 / -1 )

This is the way it works as poor English. American questions in English, Japanese banker with M<BA from Harvard listens questions and whisper to supposed to be interpreter (maybe in Japanese, or English).. Then the interpreter submit his answer. Questionnaires (maybe media) take that as poor English. The questionnaires do not think he heard English and answered right away. Bankers with MBA (some PhD in USA) are considered that they have poor English, then. It must be working in banking areas. Never can fool in tech-oriented business field.

0 ( +0 / -0 )

At times, I like him for being unafraid to speak out his mind. And as others said, there is truth in what he said.

0 ( +0 / -0 )

Anyone commenting on Japanese banks having strong risk management have no idea what they are talking about. Risk management as a coordinated department, is a relatively new and not yet mature concept. Just ask any foreign bank who sets up shop in Japan and tries to poach risk managers from other banks. There are virtually none.

0 ( +0 / -0 )

It's actually the other way around, those who bought those complex financial products didn't understand English.

-1 ( +0 / -1 )

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