"They argue that the government's stake, which is currently at 100 per cent, gives the postal bank almost a state guarantee that will encourage depositors to shift their savings out of private banks into the post bank. They are also worried that the post bank, the country's biggest bank by deposits, will encroach on the few profitable areas of banking business in Japan's sluggish economy."
Japan Post Bank started diversifying away from low-interest government bonds into more lucrative investments. In December 2010, sources said it was considering opening its first overseas office in London, "aiming to obtain the latest financial information there to help diversify its asset management schemes."
But that was before the crippling tsunami and the nuclear disaster it triggered. Whether they will finally force Japan Post's privatization remains to be seen. Other vulnerable countries have sold off their assets only to wind up in debt peonage to outside creditors.
The Japanese people are intensely patriotic, however, and they are not likely to submit quietly to domination by foreigners. They generally like their government, because they feel it is serving their interests. Hopefully the Japanese government will have the foresight and the fortitude to hang onto its colossal publicly-owned bank and use it to leverage its people's savings into the credit needed to rebuild its ravaged infrastructure, avoiding a crippling debt to foreign interests.
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This is an edited and annotated version of an article posted on Asia Times on March 31, 2011.
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