Japanese Government Mandates "Cyprus" Treatment on Bank Investors in the Future Financial Crisis

Cyprus "bail-in" was such a resounding success that it has become the template for the advanced (industrialized) nations of the world who are also swimming in debt.

No national government on the planet Earth is more indebted, as percentage of GDP, than Japan's.

Theflyonthewall.com article at Yahoo Finance (6/11/2013):

Japan to adopt 'bail-ins,' force bank losses on investors if needed, Nikkei says

Japan's Financial Services Agency will enact new rules that will forced failed bank losses on investors, if needed, via a mechanism known as a "bail-in," according to The Nikkei. Mitsubishi UFJ (MTU), Mizuho Financial (MFG) and Sumitomo Mitsui (SMFG) are among those proposing amendments to allow them to issue the types of preferred shares or subordinated bonds that would be used in such cases, the report noted.

From Nikkei's Japanese subscribers-only article which I can only see the first paragraph because I already exceeded the monthly allowance for non-paying subscribers,

金融庁は、金融機関への投資家の責任を厳しく問う新しい制度を導入する。金融危機時に国が金融機関の破綻を認定した場合、同金融機関への投資資金をカットしたりできるようにする。危機時に損失処理額の一部を投資家に負担させることで、納税者の負担を減らす。金融機関の公的支援策で、行政主導で投資家に損失負担を求める仕組みは初めて。

Financial Services Agency will introduce a new system that will harshly call to account investors in the nation's financial institutions. In a financial crisis, if the government declares a financial institution to have failed, the government will be able to cut investment capital to that institution. By having the investors shoulder part of the loss in a financial crisis, the system will reduce the burden on taxpayers. It will be the first government-led system that will impose a loss on investors.

Oh yes, it is to protect taxpayers, who are most likely also the bank depositors, i.e. "investors" who lend money to the banks.

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