The nation's 13 largest banks are saying they expect to slide further into the red for the 2001 business year, booking 7.8 trillion yen in credit costs for risky loans -- up 21 percent from November projections.
Their gloomy projections come as the Financial Services Agency prepared Friday evening to announce the results of its special audit launched in autumn. The audit was supposed to speed up banks' bad-loan disposal and restore credibility to the FSA's supervision of the banking system by targeting loans made to major banks' most heavily indebted borrowers.
But economists, citing the problems raised by Japan's debt-ridden condition, believe there is no immediate end in sight to banks' growing bad-loan problems. Nor has the FSA succeeded in regaining its credibility as a watchdog, they said.