Tokyo, Dec 12, 2007 (Jiji Press) - Japan's three megabanks have been asked to give financial support to a bailout fund being created by large U.S. banks to help shore up the market for distressed subprime-linked securities, it was learned Wednesday.
Mitsubishi UFJ Financial Group Inc. <8306>, Mizuho Financial Group Inc. <8411> and Sumitomo Mitsui Financial Group Inc. <8316> have been asked to contribute to the fund, through such steps as establishing loan commitment lines, informed sources said.
The size of the requested commitment lines is yet to be fixed, the sources said.
Meanwhile, executives of the megabanks have flatly denied the possibility of investing in the bailout fund.
The fund is designed to buy assets from structured investment vehicles, or SIVs, which issue short-term debt to finance purchases of higher-yielding assets, to avoid a worsening of the credit crunch.
The requests to Japanese megabanks come amid speculation that the rescue fund, being set up by Bank of America Corp., Citigroup Inc. and JPMorgan Chase & Co., can procure only half of the target 80 billion dollars.
The U.S. side is seeking contributions from major Japanese and European financial institutions apparently in the belief that bringing an end to the U.S. subprime loan crisis will help stabilize global financial markets.
Copyright © 2010 JCN. All rights reserved. A division of Japan Corporate News Network KK.
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