BOJ Minutes Show Difficulty of Predicting Lehman Collapse

Politics

Tokyo, July 17 (Jiji Press)--The minutes of the Bank of Japan's policy meetings in January-June 2008 showed Tuesday that the bank's policymakers had difficulty reading signs of the impending collapse of U.S. investment bank Lehman Brothers.

At the meeting in June, when the world was faced with financial uneasiness stemming from the U.S. subprime loan problem, then BOJ Governor Masaaki Shirakawa said, "The worst, or a crisis of a major bank collapsing suddenly, is perhaps behind," according to the minutes.

The remark shows that the BOJ chief of the time was unable to predict Lehman's failure that occurred three months later and triggered an unprecedented global financial crisis.

Following U.S. financial giant JP Morgan & Chase Co.'s rescue takeover of ailing U.S. brokerage house Bear Stearns in March in that year, concerns over a possible financial crisis once looked to have receded.

At the BOJ meeting in early April, Seiji Nakamura, then member of the Japanese central bank's Policy Board, said, "The market confusion has come to a lull," the minutes showed.

[Copyright The Jiji Press, Ltd.]

Jiji Press