Patriarchs add value in two ways that do not appear on balance-sheets, says Mr Fan.
Financial regulators everywhere must push banks to clean up their balance-sheets and bolster their capital.
They accordingly allowed banks to gear up their balance-sheets to a greater extent than before.
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America's banks are propped up with public capital, but their balance-sheets are clogged with toxic assets.
If so, the biggest part of the banks' balance-sheets would actually shrink relative to GDP.
The Japanese experience showed that the next job was to deal with these broken balance-sheets.
Recoveries from debt-driven busts always take years, as households and banks repair their balance-sheets.
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This takes the loans off their balance-sheets, so the remaining, riskier assets generate higher returns.
The process of contracting their balance-sheets has caused them to shift assets back home.
First, regulators are pressuring them to make their balance-sheets safer, by improving their capital ratios.
In addition, banks were allowed to use their own models to calculate the riskiness of their balance-sheets.
South Korea and Sweden owed their relatively robust recoveries to policies to remove bad loans from banks' balance-sheets.
But policymakers are worried that most banks are too busy bolstering their balance-sheets to worry much about lending.
And the country does not need financial zombies, slashing their investment in order to shore up dodgy balance-sheets.
The government wants corporate balance-sheets to become more open and conglomerates to close some of their myriad subsidiaries.
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So the banks are tempted to shrink their balance-sheets instead, which means restricting the supply of new loans.
In Europe, concerns over what lies on the balance-sheets of Deutsche and Barclays are ebbing but are not gone.
Massive fiscal and monetary stimulus is cushioning the damage to households' and banks' balance-sheets, but the underlying problems remain.
Banks are already facing demands for higher capital ratios (and thus safer balance-sheets).
This capital shortfall has already prompted asset sales by banks, which would rather shrink their balance-sheets than tap shareholders.
Banks' reluctance to lend as they strive to repair their overstretched balance-sheets is impairing the effectiveness of monetary policy.
In any case, systemic changes to institutions' balance-sheets will have a substantial impact on the types of businesses banks become.
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They use too much leverage (in other words, they have risky balance-sheets) and are thus a threat to financial stability.
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One hope is that ringfencing will stop the subsidy that investment banks get by piggybacking on retail banks' state-underwritten balance-sheets.
Even so companies may well have to draw on uncommitted credit facilities with banks, expanding the size of bank balance-sheets.
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That partly reflects a traditional year-end rush to tidy up banks' balance-sheets but also nervousness about lending directly to others.
These are reducing returns earned by banks as well as forcing them to shrink their balance-sheets and cut back on trading.
Stable house prices would do wonders in reducing loan delinquencies, shoring up the banks' balance-sheets and restoring the flow of credit.
Rivals around the world are hoarding capital to rebuild balance-sheets hammered by credit losses and to get ready for harder times ahead.
Some continental European banks have been more sluggish in cleansing their balance-sheets.
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