Japan banks’ holdings of Credit Suisse AT1 bonds small – finmin

By Tetsushi Kajimoto and Leika Kihara

TOKYO, March 28 (Reuters) – Japanese banks’ holdings of Additional Tier-1 (AT1) bonds issued by Credit Suisse are small so the direct hit from them being written down to zero will be limited, Finance Minister Shunichi Suzuki said on Tuesday.

As part of the multi-billion franc rescue of Credit Suisse CSGN.S by its rival UBS UBSG.S, Credit Suisse’s AT1 bonds with a notional value of 16 billion francs would be wiped out.

Suzuki also said some companies and wealthy individuals also hold Credit Suisse’s AT1 bonds, and will likely suffer losses.

But he added that Japanese financial institutions have sufficient liquidity and capital buffers to weather any losses.

Suzuki made the comment in parliament, when asked about the potential impact of the U.S. and European banking-sector woes on Japan’s banking sector.

Suzuki’s remarks came after Prime Minister Fumio Kishida said on Tuesday he is carefully monitoring developments in Japanese financial institutions in the wake of Western banking problems.

“Risk aversion is seen in underlying financial markets, but Japanese financial institutions have ample liquidity and capital, therefore the financial system remains stable as a whole,” Kishida told a parliament session.

“I’ll continue to pay close attention to various situations and developments with a sense of caution.”

(Reporting by Tetsushi Kajimoto and Leika Kihara; Editing by Tom Hogue and Jacqueline Wong)

((tetsushi.kajimoto@thomsonreuters.com; +81-3-6441-1829;))

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