Banking crisis worsens in Japan

A government bail-out at Japan’s fifth biggest bank is fanning fears of another financial crisis and raising serious doubts about how truthful even bigger banks are being with their books.

The pumping of what will likely be trillions of yen of public money into Resona Bank follows massive injections of government money into the banks in 1998 and 1999.

It underlines the catastrophic depth of Japan’s banking problems.

The government has not said how much money will go into Osaka-based Resona Bank, which announced over the weekend its capital had dwindled so dangerously low it must ask for public money.

Japanese media reports say the amount is likely to be about 2tln yen (€14.5bn).

What stunned many was that the bank had been doctoring its books to inflate profits for years.