One of the problems, according to Wessel, is that banks trust each other less, fearing that their colleagues may be tied to the subprime mortgage crisis.
On August 10th most of Japan's 150 regional banks and smaller trust banks valued their assets for the current six-month period.
What will happen to the closed banks' trust funds, amounting to more than 7 trillion won, which the healthy banks are reluctant to take over lest they be held responsible for any losses in investors' portfolios?
What's more, banks' trust departments, investment managers, estate lawyers and heirs nationwide have a stake in the outcome.
This is not likely to flow into the banks until trust in them, and in the tax system, rises.
The FSA's new requirement, likely to be phased in from 2016, is expected to cover major trust banks, such as Sumitomo Mitsui Trust Bank and Norinchukin Bank.
Thus, when a pension invests with multiple fund of funds managers, pension assets may be custodied at over a hundred entities, such as banks, trust organizations and brokerages, located domestically and abroad, which may or may not be regulated and which may or may not be financially sound.
Is it that banks don't trust their other banks to pay the loans back or is it they don't actually have money to lend?
It is also boosting markets thanks to hefty share-buying by trust banks managing public money.
That is so even in the lush world of trust banks, well known for their stability.
My investigations show that private and trust banks targeting the wealthy rarely provide competitive services.
FSA's banking division, which has already punished two trust banks for dodgy property deals.
In the case of Global Banks Premium Income Trust Units, looking at the history chart for GBP.
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It created from a dozen commercial and trust banks and many more securities firms the three megabank groups.
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Frank Russell, a pension consultancy, calculates that in 1985-95 trust banks' returns on pension assets averaged a cumulative 59%.
In the past this business was restricted to life-insurance companies and trust banks.
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Malabar does no advertising and sells its funds largely through financial intermediaries, such as private banks or bank trust departments.
Which is why governments did not trust banks to behave prudently if they were subject to a simple gross leverage restriction.
During the decade that followed, it created 20 banks, 745 trust companies, 34 securities firms, and 180 pawn shops, the authors have calculated.
As it happens, the finance ministry also regulates trust banks and life companies, and may not be keen to see them go bust.
There was not a single year, not even during the bubble's most effervescent period, in which Japanese trust banks outperformed their American rivals.
TQPPs' assets is still restricted to trust banks and life companies.
When fund management was in the hands of a very limited number of insurance companies and trust banks, low returns didn't matter because everyone's were low.
These changes have caused money to flood out of life-insurance companies and, to a lesser extent, trust banks, into investment advisory firms, attracted by their better performance.
Life-insurance companies and trust banks still largely monopolise pension-fund management.
The bank also estimates that profit-oriented investors (including trust banks, investment trusts, individuals and foreign funds) now own a greater proportion of those shares than do cross-holding banks and business partners who frequently prop up bad managers.
Bond trading made the situation seem dire, although it may well have been affected by investors fleeing the stock and commodities markets and parking their cash in short-term Treasury securities, fearing to trust banks in light of the current economic turmoil.
But this leads to another problem, since it leaves the central bank and the government, already the largest shareholder at several big banks, in control of an increasingly large amount of shares (though much of this is counted as shares held by trust banks).
More Americans believe in UFOs than trust their banks, the Financial Times pointed out.
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Such a scheme might increase trust in banks and take some pressure off asset markets.
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