Chapter6. Finance and Insurance Industries

1. The outstanding lending of the banks in the city, which had been declining since peaking in March 2001, has shown signs of leveling off since March 2006, and recorded 11.9 trillion yen in March 2007.
   
   
2. The deposit-loan ratio of domestic banks in the city is 65.1%, which is above the level of Aichi Prefecture (57.8%). This shows that fund management operations in the city are more active than in the rest of Aichi Prefecture. Meanwhile, the deposit-loan ratio of the city is lower than that of large metropolitan areas (including the 23 wards of Tokyo and Osaka City), with outstanding deposits far exceeding outstanding loans.
   
   
3. As regards outstanding loans of other financial institutions, the Housing Loan Corporation (predecessor to the Japan Housing Finance Agency) recorded 4.3224 trillion yen as of the end of December 2005, indicating the dominance of the Housing Loan Corporation compared to other financial institutions. It should be noted, however, that the amount of outstanding loans has been on the decrease since 2000. As regards outstanding deposits, the Norinchukin Bank recorded 4.246 trillion yen, accounting for about 80% of other financial institutions.
   
   
4. 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, as expressed by the diffusion index (DI), hit bottom in December 2002, started to rise, and remained almost unchanged for the past year. It should be noted, however, the DI has been over 20 points since June 2005. This shows that the number of companies with little difficulty in borrowing has been on the rise and remained stable in recent years, in contrast with companies that find it difficult to borrow.
   
   
5. The stock market was turbulent throughout 2006. On April 7, the Nikkei average hit a high of 17,563.37 yen. However, a series of scandals in connection with the domestic securities market as well as a global downturn pushed the Nikkei average down to a low of 14,218.60 yen on June 13. Although the downswing continued, stock prices eventually started to recover in the latter half of the year, closing at 17,225.83 yen on December 29.
   
   
6. In the insurance industry, the number of business establishments in the city has been falling since 1996. In 2004, the number of establishments reached 896, with 15,224 persons engaged in the industry. By size, the number of small establishments with less than 30 persons engaged has decreased sharply, while the number of medium-sized establishments with 30-99 persons engaged has increased steadily.