Bank Alarms Are Blaring

Across Japan's banking terrain, land mines are exploding. Depositors are yanking their money out of weakened lenders. The $155 billion housing-loan industry--the Japanese version of America's thrifts--is virtually insolvent. And the plunging stock market, off 27% this year and 65% since its 1989 peak, has erased the value of equity portfolios that big banks hoped would help defray the cost of write-offs on huge quantities of bad and restructured loans. Even the Ministry of Finance (MOF), which spent years cloaking the financial system's fragility, is visibly more concerned. Among smaller players, at least, "we will see a few bank failures," says Fuji Research Institute Chairman Toru Kisukawa.

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