U.S.

Economy in Balance Sheet Recession:

What the U.S. Can Learn from Japan’s Experience in 1990–2005

Richard C. Koo
Chief Economist
Nomura Research Institute
r-koo@nri.co.jp

February 10, 2010

Similarities between the U.S. today and Japan 15 years earlier

The global recession that began in 2008 is characterized by many unusual

features. They include massive budget deficits, the need for fiscal stimulus,
the inability of monetary policy easing to turn the economy or asset prices
around, government guarantees and capital injections to banks, and threats
by rating agencies to downgrade the credit ratings of governments running
large deficits. Indeed the seeming inability of zero interest rates and massive
quantitative easing to revive the U.S. and U.K. economies flies in the face of
conventional economics, which suggests that monetary accommodation of
such magnitude should elicit a strong response from both the economy and
asset markets. These difficulties, in turn, have made people more cautious,
as they realize that something about this recession is very different from
past recessions.

All of these unusual characteristics, however, were observed in Japan during

its Great Recession from 1990 to 2005. In fact, what is happening in the
U.S. today seems like a replay of the Japanese drama, with the same
confusion and sense of uncertainty reflected in the policy debate. Even the
path of house prices in the U.S. today and Japan 15 years ago is remarkably
similar, as shown in Exhibit 1.

The shocking similarities between the two recessions are no coincidence.

Both recessions were triggered by the bursting of debt-financed asset-price
bubbles. The collapse in asset prices left millions of private-sector balance
sheets in tatters as the liabilities incurred to purchase those assets remained

1
at their original values. With their balance sheets in a shambles, people had
no choice but to reorient their economic priorities from the usual profit
maximization to debt minimization in order to put their financial houses in
order.

This shift, in turn, nullified the effectiveness of economic theories and

policies based on the assumption that the private sector always seeks to
maximize profits. The biggest casualty here has been monetary policy.
Businesses and consumers suffering from a debt overhang are not interested
in increasing their borrowings at any interest rate, and few banks want to
lend money to borrowers with impaired balance sheets. As a result, liquidity
injections by both the Federal Reserve recently (Exhibit 2) and by the Bank
of Japan since 1990 (Exhibit 3) have failed to increase money and credit
available to the privates sector.

Moreover, those whose balance sheets are underwater will try to pay down
debt as quickly as possible to restore their credit ratings, regardless of the
level of interest rates. By 1995 Japanese interest rates were almost at zero,
but instead of borrowing more, Japan’s corporate sector became a net
repayer of debt until 2005—fully 10 years later—as shown in Exhibit 4. In
some years, net debt repayment reached 30 trillion yen, or 6 per cent of
Japan’s GDP.

The U.S. economy is in a balance sheet recession

No economics or business textbook recommends that the private sector pay

down debt when interest rates are at zero, but that was precisely what
happened in Japan for a full ten years. The textbooks never mentioned such
a possibility because they assumed that private-sector balance sheets would
always be sound. But that assumption no longer holds after a nationwide
debt-financed bubble bursts. And that is what happened to Japan after 1990,
and to the world after 2008.

It is also no coincidence that one hears so much about ‘deleveraging’ in those

countries, such as the U.S. and the U.K., where the effectiveness of monetary
easing has diminished most dramatically. In fact, the U.S. now has a higher

2
household savings rate than Japan even with interest rates at zero (Exhibit
5). The private sectors in these countries are now minimizing debt instead of
maximizing profits, and that shift has thrown the affected economies into a
balance sheet recession, a very rare type of recession that happens only after
the collapse of a nationwide asset-price bubble.

When someone saves money or pays down debt in a national economy, GDP
will shrink unless someone else steps in to borrow and spend those saved or
repaid funds. In a normal economy, the task of equating savings and
borrowings is performed by interest rates. But in a balance sheet recession,
demand for funds can remain far less than the supply even with interest
rates at zero because there are so few borrowers. As a result, unborrowed
funds remain trapped in the financial system, constituting a leakage from
the income stream and a deflationary gap in the economy. If left unchecked,
this gap will throw the economy into a deflationary spiral as the economy
loses demand equivalent to the saved but unborrowed funds each year. And
that is exactly what happened during the Great Depression, the last great
balance sheet recession, where U.S. GDP was cut in half in just four years.

Fiscal policy is the only real remedy for a balance sheet recession

Since consumers and businesses have no choice but to repair their damaged
balance sheets, the only way for the government to keep GDP from falling is
to return excess savings to the economy’s income stream by borrowing and
spending those savings in the private sector. This is why fiscal policy
centered on government spending is so essential in this rare type of recession.
Because the private sector is deleveraging, there is no danger of government
spending crowding out private investment or producing a misallocation of
resources. After all, without government action, those resources would go
unused, which is the worst form of resource allocation.

The money supply also shrinks when the private sector de-levers because
bank deposits, which is the main component of money supply, is drawn down
to repay debt. During the Great Depression, the U.S. money supply shrank
by nearly 30 percent largely for this reason (Exhibit 6). Post-1990 Japan
managed to keep its money supply from declining in spite of private sector

3
deleveraging because government borrowing took the place of private sector
borrowing and kept banks’ assets from contracting. This is shown in Exhibit
7. The post-1933 U.S. money supply also stopped shrinking and started
growing again because the government began borrowing money for its New
Deal programs, as shown in Exhibit 6. Fiscal policy is therefore essential in
keeping both GDP and the money supply from contracting during a balance
sheet recession.

Japan suffered a staggering 87 per cent nationwide drop in the value of

commercial real estate when its bubble burst, but was able to sustain GDP
above bubble-peak levels throughout the recession, as shown in Exhibit 8,
because the government borrowed and spent the excess savings generated by
the deleveraging of the private sector. In the process, government debt
increased by over 460 trillion yen, or more than 90 per cent of GDP. But that
action helped sustain over 2,000 trillion yen of GDP over the fifteen-year
period—without government action, Japan’s GDP could easily have fallen to
the pre-bubble level of 1985. Spending 460 trillion yen to support 2,000
trillion yen represents a huge success by any standard.

Policy makers around the world are beginning to realize the importance of
the Japanese experience and are now implementing fiscal stimulus following
urgent pleas by Japanese Prime Minister Taro Aso, who also used Exhibit 8
at the emergency G20 meeting held in Washington in November 2008. The
IMF has also been pushing for global fiscal stimulus since early 2008. Some
of these actions are already producing positive results.

Ending the panic is the easy part; rebuilding balance sheets is the hard part

It should be noted that the global financial panic, triggered by the mistaken
decision to let Lehman Brothers fail, sparked a global economic collapse that
was far more severe than would have been suggested by balance sheet
problems alone. This panic-driven part of the collapse had to be countered
with all the monetary policy tools that can be mobilized, and the Federal
Reserve, together with governments and central banks around the world, put
in some 8.9 trillion dollars worth of liquidity and guarantees to financial
institutions. Since the panic was caused by the government’s decision not

4
to safeguard the liabilities of a major financial institution, the economic
activities that disappeared due to the panic returned once the mistake was
reversed. That was the V-shaped recovery observed in some quarters since
the spring of 2009. With the panic subsiding, it is also appropriate that some
of the extraordinary measures taken since the Lehman shock are in the
process of being phased out.

Although the panic has subsided, all the balance sheet problems that
existed before the Lehman shock are still with us. These problems are likely
to slow down the recovery or smother it altogether unless the government
offsets the deflationary pressure from private sector deleveraging. In other
words, the recovery so far was the easy part ((B) in Exhibit 9), and the hard
part of repairing millions of impaired balance sheets has just begun ((A) in
Exhibit 9). This is no time to be complacent and cut fiscal stimulus; that
should not happen until it is certain that the private sector deleveraging
process is over.

The dangers of premature fiscal tightening

Indeed the key lesson from the Japanese experience is that fiscal support
must be maintained for the entire duration of the private-sector deleveraging
process. This is an extremely difficult task for a democracy in a peacetime,
because when the economy begins to recover, well-meaning citizens who
dislike reliance on government will argue that since fiscal pump-priming is
clearly working, it is time to reduce (what they see as wasteful) government
spending. But if the recovery is actually due to government spending and
the private sector is still in balance-sheet-repair mode, premature fiscal
reform will invariably result in another meltdown, as the Japanese found out
in 1997 and the Americans in 1937.

The Japanese mistake in 1997 not only produced five quarters of negative
growth but also increased government debt by nearly 100 trillion yen or 30
percent and prolonged the recession by at least five years. The U.S. mistake
in 1937 was so devastating that it took the massive military expenditures of
the Second World War to pull the country out of recession.

5
With the deficit as large as it is, any responsible citizen will want to see the
deficit reduced. But for such effort to actually succeed, policy makers must
make certain that funds left unborrowed by the government will be borrowed
and spent by the private sector. Otherwise they risk triggering the kind of
economic collapse seen in the U.S. in 1937 and in Japan in 1997. With
businesses, financial institutions, and households all reducing debt in the
U.S. despite record low interest rates, this is not the time to contemplate an
exit strategy for fiscal stimulus.

Ending the credit crunch and fixing the banks must be sequenced

Balance sheet recession caused by a nation-wide collapse in asset prices is

almost always accompanied by a banking crisis. The resultant credit
crunch makes already difficult situation even worse as amply demonstrated
in the U.S. recently and in Japan during 1997 to 1999. Here the key point
to remember is that the two goals of ending the credit crunch and making
individual banks lean and mean actually contradict with each other. This is
because, if all banks moved to dispose of non-performing loans (NPLs) at the
same time, everybody will be selling and nobody will be buying. That could
result in prices of those assets falling to such an extent that the banks and
the economy are weakened even further.

Banking authorities faced with this dilemma should put the first priority on
ending the credit crunch by injecting capital (with little or no conditions
attached) to the banks and deal with individual bank’s problems only after
the lending function of the banks has normalized. Injecting capital to
banks without attaching conditions is politically unpopular. But the
alternative of banks rejecting injection as happened in Japan in February
1998, or returning the capital quickly as happened in the U.S. recently
because of burdensome conditions, would leave the debilitating credit crunch
unresolved with highly undesirable consequences.

When Japan enacted the initial capital injection program with many
conditions attached, not a single bank applied for capital. Realizing that
the two goals mentioned above cannot be attained with one tool, the
government discarded the conditions in order to end the credit crunch. The

6
revamped program, which managed to inject capital in March 1998 and
again in March 1999, succeeded in ending the credit crunch that erupted in
late 1997. This is shown in Exhibit 10.

A credible 10-year NPL amortization program is needed

As for the disposal of NPLs, it is clear that no quick resolution is possible

when so many banks face the same problem. In this kind of systemic crisis,
where the financers and purchasers of distressed assets are in dangerously
short supply relative to the number of sellers, government regulators must
go slowly. What is needed is a credible ten-year NPL amortization program
where banks are given a realistic time frame to write off problem assets
using earnings under strict government supervision. Once a credible
program is in place, the market will no longer need to worry about the banks,
which in turn will enable banks to lend money without fretting about the
possibility of sudden disruptions to their funding.

This is the essence of the program implemented by Paul Volcker, then

chairman of the Federal Reserve, in response to the devastating Latin
American debt crisis of 1982. Although the cleanup process took nearly a
dozen years, the crisis did not trigger a credit crunch because banks were
allowed to quietly write off their problem loans over time.

Contrary to the popular but incorrect perception held by many overseas

observers that Japanese banks were slow to dispose of NPLs, the banks were
actually recording losses on bad loans almost as soon as they surfaced in the
late 1990s, as shown in Exhibit 11. In fact, over 83 percent of the losses were
written off before Financial Services Minister Heizo Takenaka garnered
headlines by publicly urging banks to dispose of their NPLs starting in 2002.
But that did not help the economy because borrowers were disappearing
faster than lenders.

Conclusion

Balance sheet recession is always a two-front war, with both borrowers and
lenders repairing balance sheets instead of maximizing profits. Whereas

7
bankers not lending money is front page news, borrowers not borrowing
money is seldom reported. In terms of policy response, however, the former
situation, which can be addressed with capital injection (without too many
conditions attached), is far easier to deal with than the latter, which requires
substantial and seamless government borrowing and spending to offset the
deflationary impact of private sector deleveraging.

Although government deficit spending should be avoided when the private

sector is healthy and forward looking, once in several decades when the
private sector gets carried away in a bubble and damages its financial health,
a prompt and sustained fiscal medicine from the government is essential in
minimizing both the length of recession and the eventual bill to the
taxpayers. The differences between the usual world of profit maximization
and the world of balance sheet recessions are high-lighted in Exhibit 12.

Japan took 15 years to overcome its balance sheet recession because it was
not known at that time that such disease existed. As a result, much time
was wasted trying all sorts of remedies while fiscal stimulus, the only
effective cure for the disease, was applied only intermittently, lengthening
the recession unnecessarily. Now that the experience of Japan is available
for anyone to see, there is no reason for the U.S. to repeat the same mistake.
The Federal Reserve may want to remove some of the extraordinary
monetary measures put in place to defuse the panic caused by the Lehman
shock. But the U.S. government should not embark on fiscal retrenchment
until it is absolutely certain that the private sector is healthy enough to
borrow and spend the funds left unborrowed by the government.

8
 Exhibit 1. U.S. House Price Trend Echoes That of Japan

(US: Jan. 2000=100, Japan: Dec. 1985=100) Futures

260

240 US: 10 Cities Composite Home Price Index

220 Japan: Tokyo Area Condo Price

2 Composite
(per m , 5-month moving average)
Index Futures
200

180

160
Japan: Osaka Area Condo Price
140 2
(per m , 5-month moving average)

120

100

80

60

40
92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 US
77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98
Japan
Sources: Bloomberg, Real Estate Economic Institute, Japan, S&P, S&P/Case-Shiller® Home Price Indices, as of Jan. 25, 2010

Exhibit 2. Fed’s Monetary Expansion Failed to Increase Money and

Credit Available to the Private Sector
(End of Aug. 2008 =100, Seasonally Adjusted)
250
240
Monetary Base
230
Money Supply (M2)
220
Loans and Leases in Bank Credit
210
200
Aug. 2008
190
180
170
160
150
140
130
120
110
100
90
08/1 08/3 08/5 08/7 08/9 08/11 09/1 09/3 09/5 09/7 09/9 09/11 10/1
Source: Board of Governors of the Federal Reserve System

9
 Exhibit 3. BoJ’s Monetary Expansion Failed to Increase Money and
Credit Available to the Private Sector
Quantitative
(1990/1Q=100, Seasonally adjusted) Easing
300
Monetary Base
Money Supply (M2+CD)
250
Bank Credit Extended to the Private Sector

Textbook Balance Sheet

200
Economics Recession
(Monetary Policy (Monetary Policy
Effective) NOT Effective)
150

100

1990/1Q
50

0
70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08
Note: Private sector borrowings seasonally adjusted by Nomura, adjustments made for discontinuities in line with BOJ's
"Monetary Survey"
Source: Bank of Japan

Exhibit 4. Japan’s Deleveraging Under Zero Interest Rates

Lasted for 10 Years

Funds Raised by Non-Financial Corporate Sector

(% Nominal GDP, 4Q Moving Average) (%)
25 10
CD 3M rate
20 (right scale) 8

Borrowings from Financial Institutions (left scale)

15 6

Funds Raised in Securities Markets (left scale)

10 4

5 2

0 0
Debt-
-5 Financed Balance Sheet -2
Bubble Recession
(4 years) (16 years)
-10 -4

-15 -6
85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09
Sources: Bank of Japan, Cabinet Office, Japan

10
 Exhibit 5. U.S. Households Now Have Greater Financial Surplus Than
Japanese Households

(% of GDP)
14

12

10

8
Japan
6

2 Shift of
0 8.9%
of GDP
-2
US
-4

-6
80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09
Note: Fiscal year (April to March) for Japan, calendar year for US.
Sources: BoJ, Flow of Funds , FRB, Flow of Funds Accounts of the United States

Exhibit 6. U.S. Money Supply in 1930’s Decreased Due to Private Sector

Deleveraging and Increased Due to Government Leveraging
June 1929
Balance Sheets of All Member Banks June 1936
Assets Liabilities Assets Liabilities

Money
Supply
Credit
Extended to
Deposits Private
Credit
$32.18 bil. June 1933 Sector Deposits
Extended to Assets Liabilities $15.71 bil. $34.10 bil.
Private Credit (-$0.09 bil.) (+$10.74 bil.)
Sector Extended to Deposits
$29.63 bil. Private $23.36 bil.
Sector (-$8.82 bil.)
$15.80 bil.
Credit
(-$13.83 bil.) Extended to
Public
Credit Sector
Extended to $16.30 bil.
Credit Public (+$7.67 bil.)
Extended to Other
Sector
Public Liabilities
$8.63 bil.
Sector $4.84 bil. Other
Other (+$3.18 bil.) (-$2.09 bil.)
$5.45 bil. Liabilities
Liabilities
Other Assets $7.19 bil.
$6.93 bil. Other $8.91 bil. (+$2.35 bil.)
Other Assets Assets
(+$2.54 bil.)
$8.02 bil. $6.37 bil.
(-$1.65 bil.) Reserves Capital
Capital Reserves Capital $5.61 bil. $5.24 bil.
Reserves $6.35 bil. $2.24 bil. $4.84 bil. (+$3.37 bil.) (+$0.40 bil.)
$2.36 bil. (-$0.12 bil.) (-$1.51 bil.)
Total Assets $45.46 bil. Total Assets $33.04 bil. (-$12.42 bil.) Total Assets $46.53 bil. (+$13.49 bil.)

Source: Board of Governors of the Federal Reserve System (1976), Banking and Monetary Statistics 1914-1941 , pp. 72-79

11
Exhibit 7. Japan’s Money Supply Has Been Sustained by Government Borrowings
Balance Sheets of Banks in Japan
December 1998 December 2007
Assets Liabilities
Assets Liabilities

Credit
Extended to
the Private
Credit Sector
Extended to Money Supply Money Supply
¥501.8 tril.
the Private (M2+CD) (M2+CD)
(-99.8)
Sector ¥621.5 tril. ¥744.4 tril.
¥601.6 tril. (+122.9)

Credit
Extended to the
Credit Extended
to the Public Public Sector
Sector ¥247.2 tril.
¥140.4 tril. (+106.8)
Other Liabilities
(net) Foreign assets
Foreign Assets Other Liabilities
¥153.2 tril. (net)
(net) (net)
¥74.1 tril.
¥32.7 tril. ¥78.7 tril.
(+41.4)
(-74.5)
Total Assets ¥774.7 tril. Total Assets ¥823.1 tril. (+¥48.4)

Source: Bank of Japan "Monetary Survey"

Exhibit 8. Japan’s GDP Grew Even After Massive Loss of

Wealth and Private Sector Deleveraging

(Tril. Yen, Seasonally Adjusted) (Mar. 2000=100)

600
Nominal GDP 800
550 (left scale)
700
500
600
Real GDP
450 (left scale)
500 Cumulative
Likely GDP Path GDP 90-05
400 w/o Government Action Supported by
400
Government
Action:
350
300 Down ~ ¥2000 trillion
87%
300 200
Last Seen in 1973

250 100
Land Price Index in Six Major Cities
(commercial, right scale)
200 0
80 82 84 86 88 90 92 94 96 98 00 02 04 06 08
Sources: Cabinet Office, Japan Real Estate Institute

12
 Exhibit 9. Short- and Long-term Trends in Global Economy

Bubble Lehman Shock

Likely GDP Path
Burst Without Lehman Shock

Weaker Demand
Economic weakness from Private Sector
from private-sector Deleveraging
(A)
deleveraging
following the bubble
？

Economic weakness
from policy mistake of (B)
letting Lehman fail Stronger Demand
Actual Path from Government
Current Location Fiscal Stimulus

Source: Nomura Research Institute

Exhibit 10. Two Capital Injections Ended Japan’s Credit Crunch

Bankers' Willingness to Lend as Seen by Borrowers,
and Actual Credit Extended by Banks
（'Accommodative' minus 'Restrictive', ％points ） (Y/Y%）
60 33
Bubble Burst Large Enterprises Global
30
40 Miyazawa Proposal (left scale) Financial
Crisis 27

20 24
Accommodative 21
0
18
Restrictive Credit 15
-20 Crunch
12
-40 Small Enterprises
"Takenaka Shock" 9
1st Capital Injection (left scale)
(¥1.8 tril.) (rushed NPL disposals)
6
-60
2nd Capital Injection
3
(¥7.5 tril.)
-80 0

-3
-100
Credit Extended by Banks
-6
（right scale）
-120 -9
85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09

（Shaded areas indicate periods of BOJ monetary tightening ）

Sources : "Tankan", "Loans and Discounts Outstanding by Sector", BOJ

13
 Exhibit 11. Myth and Reality of NPL Disposals in Japan:
Losses on NPLs Were Taken Long Before the Takenaka Era

(¥ tril.)
16
Actual Losses Incurred Incorrect Foreign
on NPL Disposals1 Total NPL Losses
14 Perception of
Japan's NPL ¥1021 tril. or $1.1 tril.
Disposals @ ¥90 = $1
12

10
Takenaka Equivalent to
Era $3.1 tril.
8 ¥ 11.7 tril. in the US

Losses for US
4 Financials2
$2.7 tril.
2

0
92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08
(FY)

1: Includes commercial banks only; investment banks, insurance companies and other financial institutions are NOT included.
2: Based on IMF Global Financial Stability Report (Apr. 2009). Includes all financial institutions, including hedge funds.
Source: Financial Services Agency, Japan

Exhibit 12. Contrast Between Profit Maximization and Debt Minimization

Private sector behavior Profit Maximization Debt Minimization

1) Phenomenon Textbook economy Balance sheet recession
2) Fundamental driver Adam Smith's "invisible hand" Fallacy of composition
3) Corporate financial condition Assets > Liabilities Assets < Liabilities
4) Outcome Greatest good for greatest number Depression if left unattended
5) Monetary policy Effective Ineffective (liquidity trap)
6) Fiscal policy Counterproductive (crowding-out) Effective
7) Prices Inflationary Deflationary
8) Interest rates Normal Very low
9) Savings Virtue Vice (paradox of thrift)
Quick NPL disposal Normal NPL disposal
a) Localized
10) Remedy for Pursue accountability Pursue accountability
Banking Crisis Slow NPL disposal Slow NPL disposal
b) Systemic
Fat spread Capital injection

Source: Richard Koo, The Holy Grail of Macroeconomics: Lessons from Japan’s Great Recession ,
John Wiley & Sons, Singapore, 2008

14
 Richard C. Koo

Mr. Richard C. Koo is the Chief Economist of

Nomura Research Institute, with responsibilities to provide
independent economic and market analysis to Nomura
Securities, the leading securities house in Japan, and its
clients. Before joining Nomura in 1984, Mr. Koo, a US
citizen, was an economist with the Federal Reserve Bank
of New York (1981-84). Prior to that, he was a Doctoral
Fellow of the Board of Governors of the Federal Reserve
System (1979-81). In addition to conducting financial
market research, he has also advised several Japanese
prime ministers on how best to deal with Japan's economic
and banking problems.

In addition to being one of the first non-Japanese to participate in the

making of Japan’s 5-year economic plan, he is also the only non-Japanese member
of the Defense Strategy Study Conference of the Japan Ministry of Defense.

Author of many books on Japanese economy, his latest book “The Holy Grail
of Macroeconomics - Lessons from Japan’s Great Recession” (John Wiley & Sons, 2008,
revised 2009) has been translated into and sold in four different languages. Mr. Koo
holds BAs in Political Science and Economics from the University of California at
Berkeley (1976), and MA in Economics from the Johns Hopkins University (1979).
Since 1998, Mr. Koo has been a visiting professor at Waseda University in Tokyo.

In financial circles, Mr. Koo was ranked 1st among over 100 economists
covering Japan in the Nikkei Financial Ranking for 1995, 1996 and 1997, and by
the Institutional Investor magazine for 1998. He was also ranked 1st by Nikkei
Newsletter on Bond and Money for 1998, 1999 and 2000. He was awarded the
Abramson Award by the National Association for Business Economics, Washington
D.C. for the year 2001. Mr. Koo, a native of Kobe, Japan, is married with two
children.

15