The outstanding lending of the banks in the
city. which had been declining sincepeaking in March 2001. remained
approximately at the same level from 2004. and decreased slightly
in 2006 to 11.8 trillion yen.
The deposit-loan ratio of domestic banks in
the city is 64.8%. which is above the level of Aichi Prefecture(58.0%).This
shows that fund management operations in the city are more active
than the rest of Aichi Prefecture. Meanwhile. the deposit-loan
ratio of the city is lower than that of large metropolitan areas.with
outstanding deposits farexceeding out standing loans.
As regards the trend of outstanding loans of
other financial institutions. Japan Agricultural Co-operatives
and Japan Finance Corporation for Small and Medium Enterprise
have made gains.while National Life Finance Corporation. the Government
Housing Loan Corporation and the Norinchukin Bank have recorded
losses.Outstanding deposits have been on the rise at most of the
financial institutions since 2000.
According to the results of a survey conducted
by the Nagoya Branch of the Bank of Japan. the difficulty levels
of borrowing from financial institutions by companies in the Greater
Nagoya Area expressed in the diffusion index (DI). which decreased
from its peak of 15 points in March 2001 and hit bottom in December
2002. turned to an upward trend and was 24 points in June 2006.
This shows that companies with little difficulty in borrowing
have been on the rise in recent years in contrast with companies
that find it difficult to borrow.
The stock market in 2005 boomed for the first
time since the bubble period (which lasted from the late 1980s
to the early 1990s). On May 17. the Nikkei averagehitapost-bubblelowof
10,825.39 yen.but turned upward against the backdrop of rallies
in the US stock marketand expectations for recovery of corporate
performance. On August 9. the Japanese government and the Bank
of Japan announced that the Japanese economy had overcome a temporary
lull. raising expectations that deflation would end. On December
29 (the day before the final session of the year). the Nikkei
average closed at 16,344.20 yen. the highest for 62 months.
In the insurance industry. the revised insurance
business law of Japanwas enacted in April 1996.which completely
changed the landscape of the industry. Morespecifically.life insurance
and nonlifeinsurance companies were allowed to enter each other’s
territories through subsidiaries. In recentyears.there has been
a succession of mergers and consolidations. which have pushed
down the number of business establishments and the number of persons
engaged in the city.
