Firefighting to fire prevention
Strong risk management and pragmatic incentives have left Japanese financial institutions better off than their peers in other developed economies. As a result, risk managers and policymakers attending Risk Japan 2009 are switching their attention from 'firefighting' to 'fire prevention'. Christopher Jeffery reports
Prudent regulation, less reliance on models and emphasis on innovation, and the inability of institutions to move to an originate-to-distribute model due to legacy non-performing loan problems have shielded Japan's financial sector from the worst of the financial crisis. Banks in the country have tended to employ stronger credit standards, used less leverage and often offered greater transparency than many of their peers in the West.
That's not to say there haven't been problems. Many issuers
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