With a little help from my bank japanese smes export decision

With just a little help from my bank: Japanese SMEs’ export decision

Tomohiko Inui, Keiko Ito, Daisuke Miyakawa

While large Japanese firms have already been present internationally for a long time, small firms have found it difficult to overcome the info obstacles connected with entering overseas markets. This column argues that lender banks might help as they not merely provide financial support but also business consulting services utilizing their extensive knowledge obtained through lending transactions. It implies that small and medium firms whose lender banks accumulate more overseas market information will start exporting.

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Bad bank breakdown has no personal consequences

The embarrassing accounting mistake that the HRE bad bank deals with 55.5 billion euros had offset, remains without personal consequences. Federal Finance Minister Wolfgang Schauble admitted "communication problems" after a crisis meeting with all those involved in Berlin. However, his understanding is not that personal sacrifices must now be made. The focus is on clarifying the facts and improving structures so that something like this does not happen again.

"Misunderstanding in accounting"

"Everyone involved has praised improvement," said Schauble after the meeting, to which he had summoned the institute’s manager to the ministry. He also stressed that his ministry had provided comprehensive information as soon as possible. The core of the "rather annoying story" was a "misunderstanding in accounting" between HRE and the bad bank FMS Wertmanagement. The CDU politician said that the breakdown and the large sum had unsettled the citizens. However, "at no point in time was there a risk to the financial interests of the Federal Republic of Germany". According to Schauble, the Bundesbank should now make proposals within two weeks as to how cooperation and supervision at the HRE Bad Bank could be improved.

FMS had offset itself in its balance sheet by a total of 55.5 billion euros. By correcting the calculation error, the German debt ratio has fallen by 2.6 percentage points in the current year, as the bank’s liabilities are considered government debt. HRE was nationalized during the financial crisis, and contaminated sites were transferred to the Bad Bank FSM. Taxpayers are liable for their losses.

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Bad bank of the hre is offset by 55 billion euros

Posting errors by the balance sheet experts at the bad bank of the nationalized Hypo Real Estate (HRE) have brought Federal Finance Minister Wolfgang Schauble an unexpected drop in the German national debt ratio. His ministry confirmed corresponding information from "stern.de". This means that the German debt ratio for 20.2 percent, one point lower than it was reported to the EU Commission in September. And for 2011 a general government debt level of 81.1 percent is expected – 2.6 points less than expected in the last Maastricht communication to Brussels.

Balance sheet corrected retrospectively

FMS Wertmanagement, as the Bad Bank is called, had already corrected its balance sheet retrospectively for 2010 and reported 24.5 billion less debt than previously mentioned. In the balance sheet for 2011 it should be another 31 billion. The liabilities of FMS flow directly into the German national debt – in other words: the taxpayers are liable. As "stern.de" reports, the Parliamentary State Secretary Hartmut Koschyk (CSU) had already mentioned the old and the new figures in the answer to a question from the Bundestag member Klaus Ernst (Left Party) in September. However, he did not mention the context.

Ministry of Finance calls correction "pleasant"

"We have simply forgotten to balance," said a spokesman for the Bad Bank. A spokesman for the finance ministry confirmed that a subsequent reduction in the FMS balance sheet total by 24.5 billion euros for 2010 "also had an impact on the general government debt level for the past year". For the current year, it is to be expected that the reduction of the commitments taken over by HRE at the time will continue to progress. "It is also to be welcomed that the balance sheet total, which includes derivatives and hedging transactions, has been reduced by almost ten percent compared to the 2010 annual financial statements of over EUR 30 billion". That was gratifying, it said in the Ministry of Finance. The ministry was informed last week about the balance sheet correction by FMS Wertmanagement.

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