U.S. citizen Richard Koo was born and spent his childhood in Japan, America got a degree in economics from UC Berkeley and worked for a long time, including five years - in the Federal Reserve. The best candidate for the leading analyst of the largest Japanese investment bank Nomura Securities is difficult to imagine. Experience and outlook of this cosmopolitan trivial. Not without reason, Richard Koo was among the economic advisers of many prime ministers in Japan in 90 years was an active participant in public debate on how to rescue born with evil the Japanese banking system. Back in the late 90's, Mr. Koo gave the original theoretical description of the protracted recession in Japan's economy, finding many parallels to the Great Depression in the U.S. 30-ies. In the most harmonious form of this theory in his book "The Holy Grail of macroeconomics", which was published last year. Events of the past year and a half in the U.S. economy and Japan, according to the author of the book, give grounds for classing and the current global crisis to the same class of recessions, which refers to the Ku term balance sheet recessions - crises balances. In the opinion of Ku, such crises are caused by rupture of asset bubbles, resulting in a huge number of private companies is in a situation technically bankrupt - their assets are, embodied in the real estate and securities are plummeting in price, and liabilities, the liabilities - are unchanged. The natural reaction of economic agents in this situation is to minimize the liabilities - Extra repayment of old debts and avoiding attracting new ones. The resulting paralysis of the credit activity is related, thus, not so much the inability of banks to lend to the real economy, but with a serious illness lending activity of the latter. It is clear that such a "flight from the credits" can not be cured by traditional means of monetary policy. Somehow improve the situation can only fiscal injections of the state. To mention a few very amusing figures. In the four most difficult years of the Great Depression in the USA, from July 1929 to June 1933, total assets of the banking system declined by almost a third, from 45 to 33 billion dollars, while total credit to the private sector declined by almost half - from 30 to 16 billion dollars. It took three years to total assets of banks rebounded to pre-crisis levels, but all this growth provided loans in the public sector (public works, defense contracts, etc.), while lending to the private sector continued to stagnate. A similar situation was observed in Japan twenty years ago. Aggregate bank credit to the private sector for the period 1999-2007 years was reduced by 17% and a slight increase in total assets almost doubled to ensure only infusion of credit in the public sector. Coupled with the huge budgetary infusions, they were able to prevent a fall in GDP, while ten-year recession in the economy has been provided. The sharp decline in demand for loans from Japanese companies noted in the present. What's happening with the economy of Japan? How is China? And how to extend the current global crisis? These issues were the focus of our conversation with Richard Koo, during his recent visit to Moscow. What is your assessment of the economic situation in Japan? Why the severity of the crisis? The situation is dire. Japan is just beginning to come out of the fifteen-year recession, we had only two years of strong economic growth, export-driven, and now once again suffered severe downturn. Prime Minister Koizumi's name is linked to overcoming the chronic recession 90 years, paid insufficient attention to the development of domestic demand, rural areas are degraded. But this is no one cared until the "bumiroval" export demand. The problem arose in all growth is only now, when demand for Japanese goods abroad, a dramatic fall. Feature of the current Japanese situation is that we do not have a bubble in the financial sector in the country like the U.S. or Britain. Japan's problems lie mainly in the political arena. The current prime minister, Taro Aso, perhaps like no one else is aware of the specifics "of crises in equilibrium." I know him personally for fifteen years, he is a businessman in the past and understands the severity of the situation of the corporate sector debt load. However, the real problem that fetter the activities of the Prime Minister is a political stupor - the lower house of parliament controlled by the ruling Liberal Democratic Party, and the upper chamber in the hands of the opposition. People in the province are experiencing strong dissatisfaction present study. Beginning with the Koizumi government's nobody pays attention to their problems. Mouthpiece of their interests in favor the opposition Democratic Party of Japan headed by Ichiro Ozawa. DPJ to block all initiatives LDP. What a way out of this stalemate? The economic situation is deteriorating with every passing week. More and more people believe that the country needs strong leadership in times of crisis, and in this situation, Prime Minister Aso has a chance to enhance its credibility, but only if its anti-crisis program will be convincing to the masses of society. But there is still the Bank of Japan. As far as it is independent from these domestic conflicts? Bank of Japan will be completely independent in its policy. If before 1998, we were still able to talk about some indirect dependence of the Bank of Japan from the Ministry of Finance, today it is totally independent, autonomous institution. Another thing is my deep conviction is that the essence of the current recession - not so much a shortage of supply, as demand for credit. After fifteen years of the liberation of the balance of corporations and households from a huge debt to the middle of this decade, this problem is solved in Japan in the rough. Balance sheets of corporations and banks in relatively clean. Household debt load has returned to more or less healthy level. But there was a motivational intractable problem: the business does not want to borrow money, as all of the fire shy away from loans. And with this rooted psychological problem that is difficult to do anything. Making the business to borrow measures of monetary policy, in principle, impossible. We see that the zero rate is not helping. This is very similar to the behavior of American families and companies emerging from the Great Depression: they shunned any credits before the end of his days. So today the only way to revive the Japanese economy - is to make the public sector economy to take and spend money. In your opinion, Japanese banks are now willing to lend to the corporate sector and citizens in unbounded scale? Not quite so. Japanese banks are experiencing some difficulties in connection with losses on investments in securities, including foreign ones. Dramatic decline of stock markets around the world have substantial losses, while still largely unrealized, on investments in securities. This creates additional pressure on banks' capital and limits the possibility of credit expansion, even though our banks did not have any relation to the crisis of the U.S. subprime-mortgage. Natural resolution of this conflict would be a recapitalization of Japanese banks in the state. However, this scenario meets strong resistance from bankers. They remember the negative experience of the late 90's, when the government injections of capital into banks were accompanied by serious, often non-professional intervention of state representatives in the operational business of banks. And bankers say today: "Not that." I am convinced, and I reported this to Prime Minister Aso, that the government today should give bankers a clear public assurances that the experience of 90 years will not happen again, and interference in the operating policy of the banks in return for recapitalization by the state funds at this time will not happen. If such assurances are received, I think it will help restore the credit activity of Japanese banks. How do you evaluate the initiative of the Bank of Japan to repurchase banks' commercial paper, bonds and promissory notes of corporations? Do you want an honest answer - a negative attitude. As a former employee of the central bank, a long time I served in the Federal Reserve Bank of New York, I am convinced that the risks of commercial structures have to deal with commercial bankers, rather than the central bank. If the central bank takes such risks, it is extremely dangerous exercise. If the central bank takes on its balance sheet assets are uncertain, the problem of quality, there are big doubts about the reliability of national currency, as it threatens the most serious consequences. The fact that in ancient times called the damage the coin ... Absolutely. When do you think America will come out of the recession and how quickly Japan will react to this pulse? First of all, it seems to me very dangerous for Japan, as well as for China, Korea and Taiwan, passively waiting for the restoration of the American economy in order to try to recover their stalled today, powerful export machine. Also do not forget that the Americans will be very indignant if their package of fiscal incentives to break the bank, nearly $ 800 billion, will go into the pockets of Asian exporters. This would cause a huge boost to protectionism in the U.S., which would be affected adversely by the state of the world economy. Therefore, Asian, and not only in Asian countries, it makes sense to try fiscal stimulus to revive its own economy, not waiting for America. The Chinese understand this like no other. In November last year, they announced the anti-crisis package of incentives for the giant sum to four trillion yuan, a 17 per cent of Chinese GDP. Packet size until the maximum of all reported in the world. China in its anti-crisis package focuses on investing in infrastructure. But today in Shanghai alone, more skyscrapers than in all of Japan, highways raschertili whole vast territory of China. Infrastructure development is also likely to have some reasonable limit? No need to exaggerate the degree of development of Chinese infrastructure. It suffices to drive off fifty kilometers from Shanghai, and you'll be a very different China, like back in the stone age. In rural areas, especially not in the coastal provinces, while in continental, yet a lot of work on construction and infrastructure upgrades. A more serious macroeconomic problem China - low consumption rate. But to encourage the Chinese to save less, requires some way to start up again in force in socialist China a system of social security and pensions. This is a difficult task, especially for developing countries and so large and populous country like China. A similar problem - the shortage of domestic demand - is in Japan, is not it? Yes it is. Japan - a rich country and are here to strengthen the demand can only be due to a segment of expensive goods and services, luxury goods, whose consumption requires changing the current style of life, above all - a radical increase in the free, non-working time. The second fundamental reserve boost domestic demand - the modernization of the housing stock. Most Japanese live in small apartments and houses. How do you assess the technological level of development of the Chinese economy? China has a number of advanced technologies. He builds nuclear submarines, he launches satellites into space. Although dominant in the household level technologies are still too high. I often hear from Chinese top managers that the unique know-how they need to import and borrow, - is the art of effective management of large corporations. Indeed, if you look into the inner kitchen of Chinese companies, you will be amazed by the abundance of problems with accounting, legal inconsistencies, inefficient organizational structures. Can China make the economic engine of the world, or at least the Asian region? Not so long ago I was in Beijing and talked with the head of the People's Bank of China. While America is not tired to call China, as well as Korea and Japan to revalue their currencies against the dollar. And in our conversation I suggested that if all of the key economies of the region - China, Taiwan, Korea and Japan - while increasing their currencies against the U.S. dollar, the intra-trade would not be affected, but the American consumer would be quickly felt the effects of this step, as imports from Asia would have fallen sensitive. Main Chinese banker told me this: "If now the country's leadership was Deng Xiaoping, your proposal would be accepted within five minutes. Today we will discuss this decision for many months, until we arrive at a consensus. In addition, China has still a poor country, we can not shoulder the burden of leadership in this orchestra. " Then I asked him a counter question: "Would you prefer to give the role of regional leader of Japan?" "No, no, no!" - He waved his hands. This episode demonstrates a lack of readiness of China to lead the process of economic coordination in the region, to address the leader of Asia, although the role of the second issue they disagree. I am convinced that sooner or later China will have to shoulder the burden of leadership itself, at least in Asia. How long will the current global crisis? We are just at the beginning of the development process. I think that we still do not find the bottom. Keep falling housing prices in America, Britain and China. Everywhere deteriorating macroeconomic environment. My prediction is that if countries make the right conclusions from the Japanese recession of 90 years and will carry out the program of fiscal stimulus enough, we notice signs of recovery from the crisis within three or four years. If the government will act decisively enough, the crisis may last much longer, seven or eight years.
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