"It's one of core missions of financial institutions to boldly take risks to contribute to the real economy"
-The Financial Services Agency
Japanese banking sector is regaining its strength once again as lenders from the world's third largest economy have emerged as the biggest source of cross-border loans. Japan has returned to the first position in the list prepared by the Bank of International Settlements for the first time since 1990s, before a severe banking crisis pushed it from the international markets. The BIS, which specialises on cross-border lending across the world, said Japanese banks conducted 13% of cross-border lending in the first quarter, 5% higher from the early 2007, supported by a stronger lending to emerging markets, the United States and Caribbean. At the same time U.S. and German banks accounted for 12% and 11% respectively, while British and French banks made 10% of loans. The improvement in Japanese lending was mainly led by large domestic deposit base.
Despite positive figures, Japanese banks still remain a long way below the dominant position they held in 1980s, when they accounted for more than 39% of all cross-border lending. Nonetheless, a solid rebound in lending from Japan offset a sharp drop in lending from the U.K. and Eurozone to leave the overall cross-border lending practically unchanged. Nonetheless, banking sector is likely to benefit and continue building up steam under Shinzo Abe's leadership.
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