This is reminiscent of the aggressive lending patterns in the 1980s when outside observers marveled at the astute Japanese financiers and actually believed the banks knew what they were doing. The ramifications of the NTT DoCoMo credit package have not gone unnoticed by foreign banks,which long ago realize their Japanese counterparts have no magical formula. Japanese banks were rescued by their government using public funds. That money is now being offered at rates that help to win business, but guarantee little or no profits. Not to be missed here is that the financing for NTT-DoCoMo is intended for foreign acquisitions.
Japanese banks are reluctant to lend to the myriad small and medium size businesses in Japan.
Many are significant credit risks, though many others are in better shape due to cost-cutting and restructuring. However, banks have been unwilling to extend endless credit in a less protective market. One result is an ever-increasing bankruptcy rate. The banks received a gift from the taxpayers through the huge infusion of public funds in the spring of 1999. That and the subsequent printing of money by the BOJ were designed to increase liquidity, strengthen banks, significantly increase the money supply, and keep interest rates at zero.