In a 40-minute meeting with Greenspan that started his whirlwind US tour exactly two years ago, Yanagisawa explained his agency would help sell bad assets at banks, using the government's loan collection agency rather than forcing direct asset sales. In New York, he met nearly 200 opinion makers gathered at the Upper East Side's Council on Foreign Relations.
"Minister Yanagisawa is greatly respected in the New York financial community," said Jeffrey Shafer, the Salomon Smith Barney Inc vice chairman who introduced Yanagisawa's speech.
Schafer declined to comment on progress since.
While Yanagisawa was ditched from the agency's leadership between November 1999 and last December, its record has been mixed, analysts say.
Yanagisawa and four colleagues, who doled out the ?7.5 trillion to bail out banks, decided not to close down lenders or force out management, moves that followed bank crises in the US, South Korea and Scandinavia.
They also required more lending to small and mid-sized companies, who were often the politically connected borrowers that most needed to be cut off for banks to return to profit. Banks, which wrote off ?4 trillion in bad debt last year alone, don't have the capital to shoulder many more write-offs.
This week, the FSA said about ?6 trillion in new bad loans will be created in each of the next couple of years.
On the plus side, mergers created Mizuho Holdings Inc and other giant banks. Out of the 15 banks that received public funds in 1999, 10 have merged or announced tie-ups, to strengthen their capital and compete against their international rivals.
Foreigners have played a smaller role.
Long-Term Credit Bank of Japan Ltd was sold to a group of foreign investors led by New York's Ripplewood Holdings LLC. Since renamed Shinsei Bank Ltd, the bank has been shrunk and refocused on investment banking.
Daiwa Bank Ltd, which lost the sum of ?23.5 billion (US$190 million) last year and is rated one rung below investment grade by Standard & Poor's, has been in talks to sell a stake in itself to Mellon Financial Corp or other financial firms.
Yanasigawa has been putting a positive spin on the situation, saying the problem loan total will be cut by about half by 2004 and solved by 2007.
"We're solving the problem," the 66-year-old Yanagisawa said on Japanese TV last Sunday, pointing to charts that show declining total percentage of problem loans. "Total bad loans are decreasing."
That doesn't wash with some analysts. Goldman's Atkinson says fixing the problem could take as much as 10 more years. A recent Goldman Sachs study that examined the debt and operating profit of 2,823 publicly traded companies put the bad loan total at ?237 trillion, 50 percent more than government estimates.
"I don't think he'll say the situation will be getting better," HypoVereinsbank's Kubarych said. "If he did, no one would believe him."
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