ECON-Debts Left By Bankruptcy Filers Reached Post-War High

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Apr 13, 2001 - 12:01 PM

Debts Left by Bankruptcy Filers Reached Post-War High for Last Fiscal Year The Associated Press

TOKYO (AP) - Japan's economic woes sent the number of bankruptcies up 12 percent over the last fiscal year, leaving the most unrepaid debt for any year since the end of World War II, a private research group said Friday. For the fiscal year ended March 31, the number of bankruptcies rose to 18,926 while bankruptcy debt soared 130 percent to 25.9 trillion yen ($209 billion), Tokyo-based Teikoku Databank said.

That outstripped the previous high of 15.2 trillion yen ($123 billion) for the fiscal year ending March 1999.

The massive debts underline the nation's deepening economic problems, which have dragged on for more than a decade.

Recently, the government set a two-year deadline for top banks to dispose of their riskiest bad loans, estimated at 13 trillion yen ($105 billion).

But bad loans at all of the nation's banks could be as high as 32 trillion yen ($258 billion), and government officials acknowledge huge gray areas that are likely to send that figure higher. Alarmingly, loans going sour continue to increase.

Teikoku Databank said the failure of several major life insurance companies and retail giant Sogo Co. boosted total debts for the fiscal year.

Kyoei Life Insurance, which left behind 4.5 trillion yen ($36 billion) in debts when it collapsed in October, was the postwar era's largest single bankruptcy.

Bankruptcies are likely to increase in the coming year, Teikoku Databank said. Banks are expected to cut off their worst borrowers as they face government pressure to clean up their bad debts.

In March, bankruptcy debt more than doubled from the same month a year earlier to 2.4 trillion yen ($19 billion), Teikoku Databank said. The number of bankruptcies fell 3.8 percent from a year earlier to 1,703, it said.

AP-ES-04-13-01 1200EDT © Copyright 2001 Associated Press. All rights reserved.

-- Anonymous, April 13, 2001


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