WASHINGTON -- Presaging the end to Japan's convoy system of financial protection, Liberal Democratic Party Secretary General Koichi Kato warned Tuesday that more major financial institutions will probably go bankrupt as deregulation takes effect.
Following Kato's speech in Tokyo at a forum sponsored by the Economic Strategy Institute, the key Nikkei average on the Tokyo Stock Exchange, dropped 470.43 points, or 3.02 percent, to end the morning session on the lowest level since Jan. 14. The index closed Wednesday at 15,243.84, down 357.26 points from Friday.
Kato described the 1997 collapses of Hokkaido Takushoku Bank and Yamaichi Securities Co. as "the first case where ships fell out of formation because they could not keep up with the rest of the fleet." He said more dropouts could be expected as some of the "ships" get ahead of or fall behind the others in the future.