Word: aso
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...billion economic stimulus package aimed at restoring financial stability to the country. Among other measures, the government will inject more money than originally planned into financial institutions, offer tax breaks on housing loans, and guarantee loans taken out by small-and medium-sized businesses. Prime Minister Taro Aso said the radical package was needed because "a harsh storm seen only once in 100 years is raging...
...Some are optimistic that targeted measures to prevent more business failures, such as those proposed by Aso's adminstration this week, can stem the tide."The most important thing is to prevent the bankruptcy of the real estate companies, so that it doesn't expand to other industries," says Yoji Otani, senior analyst at Credit Suisse...
Indeed, there is a sense of deja vu in the proposals of the government and regulators to stabilize the financial system. On Monday, Prime Minister Taro Aso called for a drafting of emergency measures, such as purchasing stocks held by banks, limiting the short selling of stocks and increasing the amount of taxpayer money to be injected into banks from 2 trillion yen to 10 trillion yen - all reminiscent of Japan's 1990s meltdown. The government action appears to be focused on preempting losses caused by share prices. Declared Aso, "Stock prices greatly influence the real economy...
There may be negative consequences, however, to this new round of intervention. As part of finalizing the details of the government's second stimulus package, Aso is also calling for changes to accounting rules, including a relaxation of capital adequacy requirements for banks and a suspension of the golden accounting rule of mark-to-market. Credit Suisse's Ina warns that fiddling with mark-to-market accounting (in which a bank's assets are assessed at market value) could have an affect on banks' financial earnings by "obscuring the realities." He warns that changing the current standard might "provide more...
...eyes are now on the upcoming meeting of G-7 finance ministers and central bank chiefs scheduled for Friday in Washington. On Tuesday, Japan's Prime Minister, Taro Aso, urged industrialized countries to take further measures to shore up credit markets. "The impact would be substantial if the G-7 didn't send a clear message," he said. Meanwhile, as the crisis continues to deepen, Asia's frustration continues to mount. "Masters of the Universe have bitten the dust, the same dust that is now in the mouths of the rest of us," Nirupam Sen, India's permanent representative...