Europe and its banks face a trillion-heavy euro-denominated debt wave to be redeemed, refinanced or prolonged in 2012. According to Thomson Reuters data, unsecured debt of mid and long term tenor, issued by European banks, is maturing in the amount of €725 billion this year.
Moreover, according to data of Bank of Japan, as of September 2011 the ownership of Japanese country's debt by non-Japanese residents increased to a record of ¥75.7 trillion ($981 billion), compared to ¥57.9 trillion for the same period of 2010.
Based on the background of these figures, it's important to understand the samurai bond and its ability to provide solutions to the euro-debt and the Japanese yen-strength crises.
Challenges to overcome
The refinancing plans of European banks may succeed under ideal market conditions in a scenario where investors are keen to be exposed to a double layer risk for those European names and the...