Jinn of Current Events

Times Online: Resona, one of Japan's big five "megabanks", has effectively been nationalised to save it from total financial collapse. The struggling bank, crippled by non-performing loans, applied on Saturday for an £11 billion injection of public funds. The Japanese Government agreed after an emergency meeting chaired by the Prime Minister, Junichiro Koizumi. The Bank of Japan will also extend an unlimited amount of loans without security. The other large Japanese banks are also in serious trouble. The proper way to save the Japanese banking system would be a complete liberalisation of their financial markets and privatisation of the money supply (i.e. convert to the gold standard). They can either do it now to swiftly engender creative destruction, or delay and thus prolong the agony by further hurting their economy. Looks like they're banking on the latter...