Land Of The Rising Bail In: Deposit Confiscation Coming To Japan Next

Tyler Durden's picture

We now know that 'muddle through' is over, and just as we noted here "there may only be painful ways out of this crisis" as we evidenced by Europe's attack on Cypriot depositors. With the pillars of Abenomics starting to crumble, it seems plans are afoot to prepare for the bank failures that will come from a BoJ-inspired out-of-control bond market.

As Nikkei reports, Japan's Financial Services Agency will enact new rules that will forced failed bank losses on investors, if needed, via a mechanism known as a "bail-in."

The FSA report also notes that Mitsubishi UFJ (MTU), Mizuho Financial (MFG) and Sumitomo Mitsui (SMFG) are among those proposing amendments to allow them to issue the types of preferred shares or subordinated bonds that would be used in such cases.

So not only will Japanese banks suffer VaR shock-driven needs to reduce JGB holdings but a weaker deposit base will further exacerbate the delveraging.

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buzzsaw99's picture

banks profit from bonds = bonus time

banks lose from bonds = bailout AND bonus time

max2205's picture

I will be having a sale on hari kari knives....

ZerOhead's picture

"The FSA report also notes that Mitsubishi UFJ (MTU), Mizuho Financial (MFG) and Sumitomo Mitsui (SMFG) are among those proposing amendments to allow them to issue the types of preferred shares or subordinated bonds that would be used in such cases"

Fuck that noise... if I am going to be the involuntary victim of a drive-by 'Bail In' I want nothing but equity baby... full fucking Class A non-subordinated testosterone soaked EQUITY... I want the keys to the shitmobile that they just handed me the ownership papers to...

And what I would do next would make those Abenomics clowns turn white and puke huge chunks like Paulson did back in '08...

Fish Gone Bad's picture

Can things really get that much worse in Japan?  Tokyo is irradiated, the ocean around Japan is an open sewer of radioactive death, all their kids will have leukemia in a few years and everything will soon enough be a tranquil wasteland devoid of all life.  If you take away all the money, can things really get that much worse?

I put in bread in the toaster in the morning.  When it pops out I ask, "Who wants to see what Japan looks like?"

Buck Johnson's picture

Your totally correct, Fukishima is irradiating that whole place along with the ocean.  The BOJ is in trouble and it's no wonder that our markets are having trouble trying to stay positive at all.  Because Japan is about to implode.

alphamentalist's picture

when i get pissed about the responsibility shifting tactics of the US govt and the Fed i try to remember the poor kids in fukushima/kanto that are getting tossed on the alter of japanese status quo. they have it worst of all.

Fuku Ben's picture


The whole world should be dropping these criminals in the middle of the Fukushima mess. Governments all around the world are complicit in the misery and death they knowingly inflict on those that foolishly entrust them with authority.

Large %'s of kids in and around Fukushima have been sentenced to a painful miserable life and quite possibly also an equally painful early death thanks to the lies and idiocy of a number of governments and corporations.

If you don't read Japanese let me interpret the preliminary results for you. These poor kids are f*cked.

Non Passaran's picture

Yes please fucking interpret the results for us.
The first is showing that 99% of the examined suffered no to minimal thyroid gland enlargement.

Panafrican Funktron Robot's picture

Sure, no problem.

They went from 35% having at least something developing in their thyroid, to 43% having at least something developing in their thyroid, in a one year span.  It's also worth noting that the sample size was much larger the second year of the study.  This study had nothing to do with thyroid gland enlargement, these are actual cysts/nodules forming on the thyroid itself.  The longer Fukushima remains completely uncontained (current state), the worse this is going to get.  Note also that the radiation being emitted doesn't just affect the thyroid; any/all glandular tissue is affected here.  Think reproductive organs here.  

Wile-E-Coyote's picture

I wonder have birth defects risen on Japan since the nuclear disaster. No one is saying.

Mentaliusanything's picture

The following are the Banks that have been given permission to"Bail In"

Citigroup, HSBC,Deutsche Bank,JPMorgan Chase,BNP Paribas,Barcleys, Bank of New York Mellon, Bank of America,Misubishi UFJ FG,Credit Suisse, Morgan Stanley, RBS,UBS,Bank of China, BBVA,Groupe BPCE, ING, Group Credit Agricole, Mizuho FG, Nodea, Santander, Societe Generale, Sumitomo MitsuiFG, Unicredit Group, Wells Fargo, Standard Chartered, State Street..... and of course Who else but the Bank thats not a Bank but a gambling den of thieves... Goldman Sachs.

The are deemed to be systemically " Important Financial  Institutions"


If they fail you lose baby!..... Watch and wait but be under No Illusion the credit cycle rolled over at Easter and continues.

Many other Banks have been told to prepare should one fail the stopping ofbthe falling Dominos will be brutal.


cristo's picture

I am shocked !!!!!!!!!!!!!

arkel's picture

Coming to a bank near you.

TheEdelman's picture

In Japan, bail-ins are also stated as a:


1...2...3...Karate CHOP!

alphamentalist's picture

opening a new account earns you not a toaster, not a spiderman towel, but a free gi! sign up now. supplies are limitless. 

Scisco's picture

So depositors are investors... right?

buzzsaw99's picture

Taxpayers take the loss when banks are winning at bonds, pension funds and taxpayers take the loss when banks lose at bonds. Either way the CEO gets a bonus. Simple really.

Scisco's picture

Good job if you can get it. I just hope my belief in karama is justified.

Fish Gone Bad's picture

Your belief in karma is justified.  Karma's aim is not so great though and it tends to miss a few ...

markar's picture

if that isn't bullish for gold I don't know what is

Major Major Major's picture

Option 1: Pull Yen out of bank and buy stawks


Option 2: Pull Yen out of bank and buy JGBs


Option 3: Pull Yen out of bank and buy gold / silver


Option 4: Don't pull out and pray... <--- This is what I usually do, but I don't hold Yen, and my side piece lets me.

JohnG's picture

I took option 4 and ended up with a kid.

Fish Gone Bad's picture


Medical science now knows where babies come from, so its really not the mystery people purport it to be.

BigInJapan's picture

Option 5: Pull Yen out of bank. Pull yourself out of Japan.

alfbell's picture



Kind of off thread but not really.

Is anyone familiar with HS Dent's newsletters, blogs, interviews and books to know whether he was truly as accurate as he says he was about his predictions over the last 20 years?

I just started getting into him. He's really put his credibility on the line because he has very outwardly predicted a deflationary depression starting no later than the end of 2014.

Anybody have the skinny on this guy?

fonzannoon's picture

I clearly remember his flagship "dent demographics fund" bombing and being folded into another loser fund about a decade ago.

Try Schiff, he is usually early, but right.

drdolittle's picture

You're talking about " the roaring 2000s" guy right? Dow to 20k?

Think that's the same guy. If so, not so much, cheerleader, book promoter, trend follower.

dick cheneys ghost's picture

Harry Dent is predicting Dow 3300

Matt's picture

Two-Face the Hedge Fund manager. some days he calls for the end of the world, the next he calls for DOW 20,000.

drdolittle's picture

In 1999 he had a book out, "the roaring 2000s" where he predicted dow at 20,000. Now, after the crash he predicts 3300. I think he's late to the trend. Maybe use him as a countertrend signal.

S5936's picture

Harry( flim-flam ) Dent is as phony as a 3 dollar bill. Can't believe he's still around, his track record rivals Greenspans. Stay away.

Mototard at Large's picture

Just like Cyprus, Spain, Canada and the UK are all either planning or already doing...

Surging Chaos's picture

You just got Cyprused!

alfbell's picture



Don't drone me bro!

Don't Cyprus me bro!

Don't Corzine me bro!

Don't QE me bro!

Don't record my emails and phone calls bro!

Don't turn my dollars into toilet paper bro!

Don't Obamacare me bro!

Don't high tax me bro!

Don't frisk and xray me bro!

Don't disarm me bro!

Don't chip me bro!


OneTinSoldier66's picture

You and me might be able to do some business together, just don't fiat me bro!

BigInJapan's picture

This roundeye is taking his money and going home.


NoTTD's picture

Just a Gaijin man in the land of the rising sun.

Kirk2NCC1701's picture

Dishonest Abe,

I think you're going Japanese, I think you're going Japanese, I really think so.

bitgroin's picture

The Japanese article says losses will be forced on investors, not depositors.

suteibu's picture

The IMF declares only insured/guaranteed depositors should be in Cyprus.

"The legal framework will need to clearly specify which bank liabilities may be restructured under the bail-in power. To improve transparency and avoid uncertainty, only subordinated and senior unsecured debt should be subject to bail-in. Insured/guaranteed deposits, secured debt (including covered bonds), and repurchase agreements should be excluded from restructuring."

mrjohn's picture

I think it says the burden will be put on investors, not passed on to tax payers

but of course the Zero Heads will never let accuracy get in the way of a good piece of alarmism

Matt's picture

Depositors are creditors that can be converted into equity holders, therefore depositors ARE investors.

Panafrican Funktron Robot's picture

Included in the definition of "investor" are deposits in excess of insured guarantee.  Applied to the U.S., this would mean aggregate deposits in excess of $250,000.  If you have $300K in the bank, then $50K of that is "investor funds".  

Backing reason behind this is pretty simple.  $9.6 trillion USD in deposits is insured by $25-$30 bln in FDIC insurance funds.

But hey, never let ignorance get in the way of trashing ZHers.