Japan's 10 largest banks between them had a ¥1.2 trillion exposure to the US subprime market, found a survey conducted by the JFSA, which covered 10 of Japan's largest banking groups, 110 regional banks and 455 smaller co-operative shinkin banks, until the end of September. Six of Japan's leading lenders have also reported a 45% drop in profits compared with the same period last year.

The impact of the subprime crisis was thought to be limited in Asia, but these results led Japanese finance minister Yoshimi Watanabe to announce a new focus on risk management practices within the industry and a wider consideration of the consequences of the US financial market instability. The Hong Kong Monetary Authority chief Joseph Yam also recently signalled that Hong Kong banks will also not escape the subprime wave.

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