This is usually the quarter when their financings increased and this is the first decline since 1973. Foreign currency denominated impact loans also fell for the second year in a row. Not only are Japanese corporations decreasing their dependence on bank borrowings in general but Japanese banks are also giving much greater competition.
Foreign banks find it difficult to compete with Japanese banks in yen lendings.
Foreign banks with few branches, must depend on the call market for funds while Japanese banks can use their cheaper deposit bases. Moreover, foreign banks have been greatly cutting back on their financings of Japanese sarakin or loan sharks in 1984, previously one of their largest customer groups.