Urgently seeking capital

Japan’s major banks have issued a string of synthetic balance sheet CLOs in recent months in a desperate attempt to shore up their capital reserves ahead of the fiscal year-end. Nick Sawyer reports

Japan’s banks are walking a tightrope. With so many potentially calamitous and interrelated issues to contend with – ballooning non-performing loans, the collapse of the Nikkei 225 stock index, the threat of deflation – it’s impossible to concentrate solely on any one problem before a change in government policy, a further drop in the stock market, or a renewed burst of deflation centres attention on another equally important issue.

With the fiscal year-end fast approaching, however