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2ND LD: Global turmoil causes over 2 tril. yen loss on Japanese banks: gov't+
(Japan Economic Newswire Via Acquire Media NewsEdge) TOKYO, June 6_(Kyodo) _ (EDS: ADDING INFO)
Japanese banks posted a total of 2.44 trillion yen in loss on investments in securitized products at the end of March, the government said Friday, offering fresh evidence that the global financial turmoil stemming from U.S. subprime mortgage problems has increasingly damaged their investment portfolios.
The Financial Services Agency, the country's financial watchdog, said it will continue to closely watch the efforts by financial institutions to reveal their losses at a time when international regulators are discussing imposing greater oversight on the private sector in order to prevent problems similar to the subprime crisis.
The figure, made up of losses at banks, "shinkin" banks and credit unions and other depository institutions, includes 850 billion yen in subprime-related losses incurred on their investments affected by the unsettled U.S. risky home loan market, up from 600 billion yen at the end of December.
The institutions additionally posted their losses on securitized products other than subprime loans, as the fallout of the global credit crisis spilled over into their investment portfolios.
The value of overall securitized products and some other financial products they held at the end of March was 22.79 trillion yen.
They booked a total of 1.45 trillion yen in losses on the holdings for fiscal 2007 which ended March 31, while also underlining a combined 983 billion yen in unrealized losses.
Regional banks posted a combined 148 billion yen in realized and unrealized losses on securitized products, including 47 billion yen in connection with the meltdown of the subprime mortgage market.
Meanwhile, credit unions and shinkin banks marked 211 billion yen in total losses, which include a subprime-linked 29 billion yen.
The FSA stepped up its scrutiny of financial institutions' disclosure of losses on the credit crisis, a move in line with a consensus reached among major industrialized countries.
The Group of Seven leading economies in April endorsed a report, in which the Financial Stability Forum, an advisory organ to the G-7, advised them to require banks, brokerages and other institutions to reveal their losses as quickly as possible and secure necessary capital to guard against risks of complicated credit products such as collateralized debt obligations.
The G-7 includes Britain, Canada, France, Germany, Italy, Japan and the United States.
Copyright ? 2008 Kyodo News International, Inc.
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