Japanese and U.S. business leaders on Tuesday urged the Japanese government to quickly implement a large-scale disposal of nonperforming loans using the state-run Resolution and Collection Corp.
“(The government) should take prompt, coordinated action to expedite a large-scale disposal of nonperforming loans to ensure that nonperforming assets are shifted to productive use in the real economy,” 70 corporate executives, representing the world’s two biggest economies, said in a joint statement.
The statement was adopted at the end of a two-day annual U.S.-Japan Business Conference held at a Tokyo hotel.
The business leaders also agreed that the injection of public funds, which has been discussed as a possible measure to shore up banks’ capital, should be linked to the disposal of these bad loans, adding “more effective and aggressive use of the RCC is critical in this regard.”
A large portion of the statement was dedicated to asking the Japanese government to take necessary measures to lift the country from its prolonged economic woes.
The statement also urged Tokyo to make efforts to facilitate foreign direct investment, saying it “can play a significant role in revitalizing the Japanese economy and industry.”
During the closing media conference, AT&T Chairman and CEO Michael Armstrong played down the concern that active bad loan disposals through the RCC and the promotion of foreign direct investment may lead to the expansion of so-called vulture capital funds.
“I don’t think you should be concerned,” he said, noting examples in the U.S. showed that venture capitals as well as “other standard companies” invest on these occasions.
Armstrong was the U.S. chair for the conference while Toshiba Corp. Chairman Taizo Nishimuro served as the Japanese counterpart. The next conference is scheduled to be held in Washington D.C. on Dec. 2 and Dec. 3, 2003.