Broad-Based Asset Management Programs

The Resolution and Collection Corporation of Japan

Purpose

“[A]ccelerate the recovery and collection of non-performing loans transferred from failed [and solvent] financial institutions through a fair and transparent process in order to minimize public costs” (DICJ 2005a, i).

Key Terms

  • Launch Dates
    Announcement (merger): October 1998 Operational: April 1, 1999
  • Wind-down Dates
    Expiration date for transfers: N/A for insolvent; March 31, 2005, for solvent
  • Size and Type of NPL Problem
    Official estimate of 17% of banking system loans in 1998 (Lincoln 1998) Corporate, equities, and real estate
  • Program Size
    Not specified at outset
  • Eligible Institutions
    All Japanese financial institutions Both open and closed banks
  • Usage
    Solvent: ¥353 billion (purchase price) for ¥4,004 billion (book value, approximately $37 billion) Insolvent: ¥6,366 billion (purchase price) for an estimated ¥29,000 billion (book value)
  • Outcomes
    Solvent: Recovered ¥642 billion on ¥353 billion Insolvent: Recovered ¥7,143 billion on ¥6,366 billion
  • Ownership Structure
    Government-owned
  • Notable Features
    Special investigative powers to take on difficult cases such as those tied to organized crime; purchased loans at a steep discount; created from merger of prior asset management agencies

Key Design Decisions

Part of a Package2

Special Powers1

Mandate1

Communication1

Ownership Structure1

Governance/Administration1

Program Size1

Funding Source1

Eligible Institutions1

Eligible Assets1

Acquisition - Mechanics2

Acquisition - Pricing1

Management and Disposal2

Timeframe1

Key Program Documents

Key Program Documents

Key Program Documents

Key Program Documents

Key Program Documents

Key Program Documents

Key Program Documents

Taxonomy

Intervention Categories:

  • Broad-Based Asset Management Programs

Countries and Regions:

  • Japan

Crises:

  • Japanese Crisis 1990s