Note 2-24

(24) Amid the financial liberalization since the late 1980s, blue-chip companies that had been a stable source of profits for financial institutions have gradually shifted away from dependence on financial institutions to fund-raising through direct finance. Since the 1990s, financial institutions have had to use unrealized gains on shareholdings for covering losses on NPL disposal, and share sales and write-offs and avoid stock price fluctuation risks. Financial institutions' corporate customers for their part have tried to improve their capital efficiency amid the economic slump. As a result, financial institutions and their corporate customers have increasingly unwound their cross shareholdings.