An overwhelming problem

It seems everyone understands Japan’s fundamental problems except Japan. It is woefully ill-prepared in terms of risk management and its creditworthiness is set to snap. So what good could come out of the current dire straits? By Ellen Leander

There is no mistaking the seriousness of the situation in Japan. The crises it is suffering from – economic, banking, equity markets and corporate credit quality, among others – are threatening to add to the general global malaise that has cast a cloud over the US and Europe.

But the fascinating thing is that most of Japan’s problems are due to poor risk management practices by banks, companies and even the government. Not surprisingly, most of the solutions come down to improvements in risk