Resona fund injection to have limited impact on other banks.

Japan Weekly Monitor, May, 2003

TOKYO, May 19 Kyodo

The government's decision to inject public funds into Resona Bank will have only ''limited effects'' on the management of other major Japanese banks if viewed in the short term, Daiwa Institute of Research Ltd. said Monday.

While Resona Bank faces a capital shortfall as a result of stricter accounting of deferred tax assets, other major banks have calculated the assets more conservatively, the leading economic think tank said in a report.

Under current accounting rules, deferred tax assets, which result from losses from taxable bad-loan write-offs and are set off against future taxable income, can be counted as capital for up to five years in the future.

Daiwa said that as major banks carried out large capital...