It appears that the major Japanese banks are getting government pressure to help bailout subprime financial instruments, and they are profoundly disinterested in doing so.

Japan big banks reluctant to pay for subprime fund
Mon Dec 17, 2007 5:44am EST

By Nathan Layne and Taro Fuse

TOKYO (Reuters) – Japan’s top three banks are expected to resist a request to put up a total of $15 billion for a U.S.-led subprime rescue fund, a move that could further cloud prospects for the bailout plan.

Sources told Reuters last week that Mitsubishi UFJ Financial Group (8306.T: Quote, Profile, Research), Mizuho Financial Group (8411.T: Quote, Profile, Research) and Sumitomo Mitsui Financial Group Inc (8316.T: Quote, Profile, Research) had each been asked to pony up $5 billion, and to give an answer this week.

…

But the issue could yet become political, the megabank executive said. Japanese banks are eager to expand their presence overseas and will not want to be seen as turning a blind eye to the health of the global financial system.

“What did America do when we had our non-performing loan problem? They just pushed us into the corner. European banks also ran away. Why should Japan now shoulder this burden?” said the megabank executive. “But this is a decision made at a high political level and could end up defying logic.

Part of this is the fact that the rest of the world pretended not to know them during the Japanese crisis, but another, larger part is the fact that the Japanese banks have largely cleaned up their act. The lack of transparency, cozy relationships, and self dealing in the subprime debacle mirror their experience 15 years ago.

What’s more, they understand that this bailout will interfere with reform, because it will largely serve to allow the worst miscreants to dump their investments on someone further down the economic knowledge chain (you know, teachers’ retirement funds, etc).