Low net worth individuals owning a high proportion of foreign currency assets would likely need to sell some of these assets if their cash deposit holdings (in Japan) did not cover their (immediate) needs.

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Bankers have already had to roll over many of these loans, and, thanks to currency crises and economic collapses, a large proportion will probably end up unrecoverable.

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One reason is that their usual sources of capital, institutional investors, hitherto often trapped by regulations requiring them to keep a certain proportion of their assets in their domestic currency, are now, thanks to the euro, able to spread their wings.

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In addition, a bigger proportion of deals are being paid for in cash, a currency which managers tend to harbour more prudently than shares and which is a less forgiving measuring rod.

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One reason is that several countries in Europe, such as Germany and Spain, limit the proportion of assets that insurers or pension funds can invest outside their own currency.

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