The Reason My hair is Blonde Cause and effect Part-1

 Chapter 24

It happened when I was going to the Keika-in Bank's head office by limousine.

"It's not looking good for the Asian currency crisis. The bad debt problem is reemerging, isn't it?" I muttered while reading reports in the back seat.

Japan's with it's bad debt disposal had barely survived with the support of the government and business leaders, but the Asian currency crisis starting from Thailand was once again causing credit instability.

"But there are favorable aspects for you as well, Miss."

"Oh you already onto that?"

The conglomerate trading companies bore the brunt of the Asian currency crisis, particularly those heavily invested in Southeast Asia. As they served as vital links for numerous Japanese firms, they couldn't ignore the ensuing political turmoil. Meanwhile, Japan's 5% consumption tax hike further dampened economic activity, compounding the lingering wounds of the bubble burst on the economy. Whispers of credit instability only intensified in the wake of these developments.

Thanks to this, I was able to acquire a lower-ranked trading company I so much desired.

"Well, if it's 200 billion yen, it's a bargain. And Toudou-san wanted it too."

It's not an amount that an elementary school student should think about spending , but I had grown accustomed to seeing such transactions in the financial papers.

[Tokyo Shibaura-ku-based Matsuno Trading, announced its acquisition by Moonlight Fund. With capital from Moonlight Fund, Matsuno Trading aims to stabilize its operations by disposing of bad debts. Matsuno Trading had been struggling with bad debt disposal since the collapse of the bubble economy and faced management instability due to the Asian currency crisis. Therefore, Moonlight Fund purchased all the loans that the main bank had extended to Matsuno Trading, intervened in Matsuno Trading's management, carried out a capital reduction, clarified shareholder responsibilities, and accepted debt-to-equity conversion and third-party allotment increases from Moonlight Fund.]

What differentiated Keika-in Bank's approach to bad debt disposal from Matsuno Trading was that while Keika-in Bank was the "lender," Matsuno Trading was the "borrower." The 180 billion yen was in the hands of the bank as loans. Under the main bank system, banks could manage and operate substantial cash reserves during peacetime, but they could also suffer from bad debts when things turned sour.

The consortium of banks had yet to classify their loans to Matsuno Trading as "unrecoverable cash," even though there were concerns about the company's financial stability. However, with the onset of the Asian currency crisis, banks suddenly found themselves short on liquidity.

Furthermore, one of the banks that served as Matsuno Trading's main bank needed to clean up its image through a merger, while the other was pushed into a state of brain-death due to a corporate blackmail incident. This immediately led to a crisis in management.

"However, couldn't you have negotiated a lower price?"

"In that case, the bank wouldn't be able to recover the loan. They're relieved it didn't turn into bad debt. It's just pocket change to us. They won't be troubled if it disappears like foam."

The acquisition of Matsuno Trading was primarily conducted between banks. Moonlight Fund purchased the loans that the main bank held for Matsuno Trading. By consolidating the loans with Moonlight Fund, offering debt-to-equity conversion and third-party allotment increases, Moonlight Fund swiftly gained control of Matsuno Trading.

There was a slight difference in the method or rather, the trickery involved. All these transactions took place at the respective banks' New York branches. Based on the assumption of huge profits from US IT companies, Keika-in Bank lent money to Moonlight Fund, which then purchased Matsuno Trading's debt in US dollars.

While the main bank side bore the risk of exchange losses to convert these dollars into yen, they accepted it as a price for buying bad debts without any discount. Of course, Keika-in Bank had repaid the loan after the completion of this transaction.

"The reason why Japan's financial institutions' bad debts have grown so large is because the gap between the value and the credit has become intolerable. If you lend 1 million and only receive back 500,000, the bank suffers a loss. Of course, they had collateral like land or stocks, but with everything falling in value, they couldn't recover the 1 million, and that's why they're suffering so much."

I remembered Ichijou's words.

That's why when banks forgive debts during borrower relief - that is, when they waive the debt - the banks also incur damage and special losses of uncollectible debts.

Thus, Japanese companies collectively plunged into the quagmire of bad debts. And in such a situation, what if the loans that were written off as irrecoverable were fully recovered?

The banks wouldn't incur losses and could proceed with the bad debt disposal of other companies. On the other hand, the borrowing companies would be spared from the banks' repayment pressure.

The characteristic of Japan's bad debts lay in the fact that the companies themselves had considerable earning power, but they struggled to repay the inflated bad debts - the land and buildings purchased at high prices through excessive bank lending - in the aftermath of the burst bubble economy.

Therefore, many companies could recover once they repaid the excessive bank lending. Matsuno Trading was one such company.

"Let's send Toudou-san to meet the president of Matsuno Trading. What about the selection of other directors?"

"It has already been arranged."

The visit to Keika-in Bank headquarters was to advance this confirmation with Ichijou. Despite being a lower-ranked company in the city square Matsuno Trading was one of the top ten trading companies in scale. It would be wise to involved it in the redevelopment project in Sakata City.

"Milady, are you okay with this?" 

Tachibana's interruption, prompted by something from the driver, Mitsukane Sone, momentarily halted my thoughts. It was what followed from his lips that caught me off guard.

"We're being followed. I've contacted headquarters via the car phone and summoned our people. I've also informed the Tokyo Metropolitan Police Protection Division. I strongly advise canceling all your appointments for today."

Given my status as a duke's daughter, it was only natural to have exclusive security from the Keika-in Dukedom. Besides Mitsukane Sone, our driver, and Tachibana, there was also a female bodyguard in the limousine. Bulletproof Mercedes-Benz cars flanked our vehicle, with two guards each.

However, the fact that we were being followed required careful consideration.

"Understood. So, do you think they're from inside or outside?"

Tachibana simply shook her head in response to my question, accompanied by a sigh.

Internally, there were ample reasons for the Keika-in family and its affiliates to target me. The most obvious reason being the "Moonlight Fund," an internal matter within Keika-in Bank, which constitutes a significant portion of the bank's revenue, and only I know its true nature & control of it. Various attempts had already been made to eliminate me or recruit Tachibana and Ichijou, including enticing offers and other tactics.

The reasons for their refusal were straightforward.

"I was entrusted by the head of the family to take care of Miss Runa."

Tachibana's case was primarily due to his loyalty to my grandfather, Keika-in Hikomaro. Despite being an upstart aristocrat, with nearly half a century having passed since World War II, there had been enough time to cultivate loyal retainers within the Keika-in family.

"I used to be the branch manager at the Far Eastern Bank's Tokyo branch, so I thought my only option was to be transferred elsewhere. But now, I'm an executive officer at the headquarters. And that's all thanks to your scheming. With Keika-in Bank, dominated by Ministry of Finance retirees and executives from urban banks, if it weren't for your support, I'd have been sacked immediately. There's no way I could betray you."

I couldn't help but smile at Ichijou's explanation. By the way, an executive officer is a high-ranking employee, but strictly speaking, they are not board members. Keika-in Bank had introduced this position, following in the footsteps of a certain electronics manufacturer that had recently introduced a similar system for their executives' treatment. The decision to implement executive officers was primarily for the treatment of Tachibana, who was promoted at the insistence of Ichijou and her uncle, Keika-in Kyomaro. Currently, half of Keika-in Bank's board members and executive officers are former Ministry of Finance officials, with the remaining positions occupied by executives from Hokkaido Development Bank, Choshin Bank, and Credit Banks.

Unfortunately, there was an even clearer explanation for the external threat: we were perfect targets for activities such as kidnapping for ransom.

"Change the route to the pharmaceutical headquarters."

"Wait. It's fine to go to the pharmaceutical headquarters, but changing the route might be risky. It's safer to go to the bank headquarters first and then head to the pharmaceutical company. The bank's security personnel can be useful, and you can take the subway from Kyobashi Station to Kasumigaseki. That way, you'll get there faster."

Several buildings in Tokyo had become Keika-in Group properties due to the bank's bailout, prompting the group's headquarters relocation. The core of the group, Keika-in Pharmaceutical, moved to Hibiya, where the former Choshin Bank headquarters were located, while Keika-in Bank consolidated its headquarters in Kyobashi, where the former Ichiyama Securities headquarters were situated.

"Miss, there's an issue with that plan. The distance from the bank headquarters to Kyobashi Station is significant."

About 400-500 meters away.

"That's a good point."

With a smile, I replied, "But we have a solution."

The Eitai Bridge.

A car that had been acting suspiciously blatantly changed course upon noticing us and speed eastward, perhaps to avoid questioning by our security personnel. I observed its departure from the deck of the ship.

"Miss, how long have you been considering this plan?"

"For quite some time. You know how Tokyo has many rivers, right? I thought incorporating boats as a means of transportation would make it easier to shake off pursuers."

I responded to Tachibana, and my golden hair swayed in the sea breeze.

Behind the former Ichiyama Securities headquarters, there was the Nihonbashi River, which served as a small dock. So, there was no reason not to use it.

"I want you to head to Takeshiba Pier.

We'll board the car provided by the pharmaceutical headquarters there. We'll disembark once they're ready."

The convenient aspect of the boat was that, as long as it didn't dock, no one could come and go, and it was equipped with a radio for communication. In this situation, we had a significant advantage.

"Miss, we have a report from the bank headquarters security personnel. I kept a record of the license plate number... but it's turned into quite a predicament."

"I reported the license plate number we recorded to the Tokyo Metropolitan Police, but it turns out it's a registered vehicle of the Russian Embassy."

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Authors Note

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Asian Currency Crisis

　A large-scale financial crisis occurred in ASEAN countries including Thailand.

　When you think about it, it's amazing how crowded this area is both domestically and internationally.

Matsuno trading

　In 1999, the company reduced its capital by 33.7 billion yen and waived approximately 150 billion yen in debt from its trading banks, but since then it has made a comeback.

Converting debt into equity

     Debt-equity swaps.

     Debts must be repaid, but if it's an investment, the repayment is done by handing over the company's shares.

      In other words, this is a method of reducing debt by handing over the company's stock rather than cash repayment.

　As a disadvantage, in order to avoid stock dilution (debt becomes investment, the stock will further increase) and moral hazard (management will think that it is okay to repay debt by handing over stock). In this story, the company is forcing shareholders to take responsibility by reducing their capital, and then forcing the entire management team to resign.　

Tokyo Metropolitan Police Department Security Section 5

　It is a fictional department that does not exist in reality, but is set to be responsible for guarding the nobility.

A certain electronics manufacturer that releases game consoles and makes them scream

　Manufacturer that released a certain station. In this year, FF7 was released and won the next generation machine war and established supremacy.

diplomatic immunity

　Privileges granted to diplomats include immunity from arrest and inviolability of r

esidence.

　For this reason, having a spy ride in a car with an embassy plate number is one of the classics of spy novels.