The Blackrock of Japan | Full Documentary

Summary

This video script details the rise and transformation of Sumitomo Corporation and SMBC, the 'Black Rock of Japan,' from their origins in copper smelting to becoming a global financial powerhouse. It navigates through historical crises, strategic acquisitions, and mergers, showcasing their resilience and strategic maneuvers in the face of economic turmoil, government intervention, and public backlash. The script also hints at their alleged connections with the Yakuza and recent legal challenges, all while emphasizing their vast influence across various sectors of the world economy.

Takeaways

• 🏦 The Japanese economy faced a severe crisis after the bursting of the 'bubble economy', leading to bank bankruptcies and an increase in homelessness.
• 💸 The government intervened by injecting billions into failing banks, but public outrage grew against bank officials, who were seen as public enemies.
• 🔄 Two banks, Sumitomo and SMBC, used the crisis to seize control and grow their influence, becoming major players in various sectors of the world economy.
• 📈 Sumitomo Corporation evolved from a copper smelting company into a multi-trillion conglomerate with interests in finance, energy, healthcare, entertainment, and retail.
• 🏦 SMBC became the fourth-largest bank globally, controlling parts of every sector of the world economy and partnering with international giants like BlackRock and Goldman Sachs.
• 🛠️ Sumitomo's success was partly due to innovative smelting technology that allowed for efficient silver extraction from copper, transforming their business.
• 🌐 The Sumitomo zaibatsu expanded its influence through strategic acquisitions and development of copper mines, becoming a powerful conglomerate in Japan.
• 🔄 After World War II, the zaibatsu were broken up due to anti-monopoly laws, but Sumitomo reformed and re-emerged stronger, adapting to the new economic landscape.
• 💡 Shoichiro Toyoda played a crucial role in transforming Sumitomo Bank into a modern financial corporation, using an authoritarian leadership style to drive growth.
• 💸 Sumitomo Bank's investment in Mazda, despite initial failures, demonstrated their commitment to supporting companies through tough times, which eventually paid off.
• 🌐 The bank's division into semi-autonomous units and strategic international acquisitions, such as Swiss Bank Corp, expanded its global reach and influence.

Q & A

What was the impact of the Japanese asset bubble burst on the banking industry?

The Japanese asset bubble burst led to a severe economic downturn, causing many of the largest banks in the world to announce bankruptcies and foreclosures. This resulted in a significant increase in homelessness as people lost their houses and the government had to step in to save these mismanaged banks by pumping billions into them.

How did Sumitomo Corporation evolve from its origins to become a major global player?

Sumitomo Corporation started as a copper smelting company and expanded its operations over centuries. It developed efficient smelting technology to extract silver from copper, which transformed their business. The company diversified into various sectors such as textiles, sugar, and medicine, eventually becoming a trillion-dollar conglomerate with a significant presence in the global economy.

What is SMBC, and how did it become the fourth largest bank in the world based on assets?

SMBC, or Sumitomo Mitsui Banking Corporation, is a result of the merger between Sumitomo Bank and Mitsubishi Bank. It became the fourth largest bank in the world based on assets by controlling various sectors of the world economy, including financial, energy, healthcare, entertainment, and retail sectors.

What was the significance of the Meiji Restoration for Sumitomo and Japan's modernization?

The Meiji Restoration marked a significant shift in Japan's governance and initiated the country's modernization. For Sumitomo, this period allowed them to introduce high technology from overseas, modernize their copper mining operations, and expand their business, playing a crucial role in Japan's rapid economic and industrial development.

How did Sumitomo Bank navigate the challenges during the post-World War II era, including the dissolution of zaibatsu?

After World War II, Sumitomo Bank faced the challenge of the zaibatsu dissolution imposed by the Allied Powers. They were forced to break down into smaller companies and were forbidden from using their former names. However, they managed to reorganize and reform under the new antimonopoly laws, eventually becoming a keiretsu, which is a more decentralized form of business conglomerate.

What role did Shojiro Ishibashi play in the transformation of Sumitomo Bank?

Shojiro Ishibashi is credited with transforming Sumitomo Bank from a family-owned bank into a modern banking corporation, Sumitomo Mitsui Banking Corporation. He implemented an authoritarian leadership style that focused on growth through lending and investments, which significantly increased the bank's size and influence.

How did Sumitomo Bank's relationship with Mazda impact the company's growth?

When Mazda approached Sumitomo Bank for funding to mass-produce their new rotary engine, the bank supported them despite the engine's initial failure. Instead of abandoning Mazda, Sumitomo Bank's leader Sho Ishibashi supported the company through reorganization, which later contributed to the bank's growth as Mazda became a major client.

What was the significance of the merger between Sumitomo Bank and Hwa Soo Bank?

The merger between Sumitomo Bank and Hwa Soo Bank was significant as it catapulted Sumitomo to become Japan's second-largest city bank, next to Daiichi Kangyo Bank. This merger expanded Sumitomo's local market presence and customer base.

How did the Asian financial crisis of 1997 affect Sumitomo Mitsui Banking Corporation?

The Asian financial crisis exposed the weaknesses of the so-called Asian tigers, including Japan. The crisis led to the bursting of Japan's asset price bubble, causing equity and asset prices to fall and leaving Japanese banks, including Sumitomo Mitsui Banking Corporation, with bad debts. This resulted in bailouts, consolidations, and a period of slow economic growth known as the Lost Decade.

What steps did Sumitomo Mitsui Banking Corporation take to recover from the economic downturn and regain its strength?

To recover from the economic downturn, Sumitomo Mitsui Banking Corporation wrote off billions of dollars in bad loans, accepted a massive capital injection from the government, and merged with Mitsui Bank, a 400-year-old institution. They also engaged in strategic acquisitions, such as purchasing City Group Japan and RBS Aviation Capital, and implemented measures to grow their international presence.