Analysts say loose credit
conditions in Japan have expanded yen-carry trades, in which investors borrow cheap funds in Japan to invest in higher-yielding assets elsewhere.
Over the past several years--thanks in large measure to the Federal Reserve's loose credit
policies--the housing market has undergone a spectacular boom as millions of Americans have become first-time homebuyers.
Although the embattled automaker declined to explain the reason for his resignation, the departure is widely seen as Torok taking the blame for poor sales and financial woes at a Mitsubishi Motors' unit in North America due to its loose credit
Extremely loose credit
conditions fueled unprecedented growth in the leveraged loan market, coupled with aggressive lending practices and the broad acceptance of 'covenant-lite' loans.
They said that the Fed had to atone for failing to rein in loose credit
policies that according to them encouraged the financial crisis in the country.
In February, Mitsubishi Motors raised its group net loss estimate to 72 billion yen from an earlier projected 11 billion yen for the business year to March 31 due to a slump in sales in North America and financial woes resulting from loose credit
controls at its North American finance unit.
A greater concern in the long term, however, is the possibility that the government's current focus on existing bad loan problems might allow banks to maintain their loose credit
assessment on borrowers needing attention and thus would allow the continuance of the currently inefficient economic system,'' the report said.
We are seeing a tremendous increase in distressed situations directly resulting from the abundance of loose credit
available during the credit bubble of 2006/2007.
His predictions of the hazards caused by overvaluation and loose credit
standards have been proven correct this year.
Given the abundance of capital still available, and the current loose credit
environment, Fitch believes the packaging sector remains a likely hunting ground for buyouts or other private investors looking to take ownership stakes.