RetireJapan

Long story short, I am concerned about banks defaulting in a coming crisis. My almost retired Japanese friend independently mentioned to me that Japanese banks might be in trouble, where I had already heard that this myself before, in addition to European banks, and probably North American banks too (due to low/negative interest rates). He also reminded me that accounts in each Japanese bank are insured by the government(?) up to 10M JPY and I confirmed that I had found this same number for my particular bank when I looked it up a few years ago, and it is on par with my home country bank as well.

1) Is anyone able to confirm this same insured amount for SBI Monex and Rakuten? (Curious if these are different as US brokerages Interactive Brokers and Tradestation have 500k USD insured but 250k USD limit for cash)
2) Is anyone else concerned about this and therefore spread their money around different accounts to keep them under 10M?
3) It makes me wonder, what do rich people do? Are they concerned with bank default risk and spread it around, invest in other things like real estate etc. or nobody is concerned about it and let their accounts appreciate well beyond 10M?

Here are some details.

https://www.jp-bank.japanpost.jp/yokinh ... index.html

https://ja.wikipedia.org/wiki/%E3%83%9A ... %E8%AD%B7)

Securities companies, usually use a holding bank model. If the broker goes broke or vice versa there is some protection.

Your best bet if you are REALLY worried about this is to go with the MUFJ or the ゆうちょ。They are two of the largest banks by assets. If ゆうちょ goes down, the Yen is useless anyways.

https://en.wikipedia.org/wiki/List_of_largest_banks

However, I do not think this is a real risk. If you truly believed this was a serious possibility you could simply buy silver and gold bullion.

I looked into this a while ago (for banks, not sure about securities accounts)

viewtopic.php?f=20&t=977

Is anyone able to confirm this same insured amount for SBI Monex and Rakuten?

My understanding is there is a similar protection up to 10M yen under the Japan Investor Protection Fund.
From that page:

JIPF implements investor protection by providing compensation of up to \10 million per customer in cases where a securities firm cannot return the money and securities of customers because of bankruptcy or other financial difficulties.
...
All securities firms are obliged to become members of JIPF.

Monex, Rakuten and SBI are members.

I currently have an account with SBI and Rakuten and both accounts hold about 50% of my investments. I created the Rakuten account after my SBI investments grew to a decent size, mainly to reduce potential risks if one of those brokers would become insolvent.

Yokohama wrote: ↑Tue Nov 10, 2020 11:53 pm

JIPF implements investor protection by providing compensation of up to \10 million per customer in cases where a securities firm cannot return the money and securities of customers because of bankruptcy or other financial difficulties.

That's good to know (even if they wrote it on Windows and screwed up the ¥ character). The following paragraph is more reassuring especially considering ¥10M is pretty small when considering retirement savings:

Securities firms ensure the preservation of customer assets by managing them separately.

• Securities firms are required by law to manage the money, shares, bonds, and other securities entrusted by customers strictly separately from their own assets. This is called the separate management of customer assets.
• As long as separate management is thoroughly observed, even if a securities firm goes bankrupt, this will in principle have no effect on customer assets and customers can request return of their money and securities from the bankrupt securities firm.
• Assets which customers entrust to securities firms are protected by the dual systems of this separate management system and compensation by JIPF.

adamu wrote: ↑Wed Nov 11, 2020 12:50 am

Yokohama wrote: ↑Tue Nov 10, 2020 11:53 pm

JIPF implements investor protection by providing compensation of up to \10 million per customer in cases where a securities firm cannot return the money and securities of customers because of bankruptcy or other financial difficulties.

That's good to know (even if they wrote it on Windows and screwed up the ¥ character). The following paragraph is more reassuring especially considering ¥10M is pretty small when considering retirement savings:

Securities firms ensure the preservation of customer assets by managing them separately.

• Securities firms are required by law to manage the money, shares, bonds, and other securities entrusted by customers strictly separately from their own assets. This is called the separate management of customer assets.
• As long as separate management is thoroughly observed, even if a securities firm goes bankrupt, this will in principle have no effect on customer assets and customers can request return of their money and securities from the bankrupt securities firm.
• Assets which customers entrust to securities firms are protected by the dual systems of this separate management system and compensation by JIPF.

Yes, interesting. In the most optimistic sense, it sounds like we could get our shares back but not likely any un-invested cash.