WASHINGTON – Japan will adhere to its goal of disposing of banks’ nonperforming loans within three years, Prime Minister Junichiro Koizumi told U.S. President George W. Bush on Tuesday.
Speaking before reporters after meeting with Bush, Koizumi said he clarified to the president Japan’s policy on resolving the bad-loan issue.
“Our government’s policy toward structural reform is unwavering,” Koizumi said in reply to Bush’s request for Japan to carry out the promised structural reform as a means to revive its diseased economy. The request includes aggressive disposal of the bad loans that have paralyzed the banking sector since the burst of the bubble economy in the early 1990s.
The prime minister indicated the government will use the state-run Resolution and Collection Corp. to promote the disposal of nonperforming loans.
Koizumi said the government would take action to make the RCC functional and promised to enhance its functions to reduce bad loans.
Koizumi’s structural reform calls for Japanese banks to dispose of the loans within two to three years or sell them to the RCC.
Skepticism over Koizumi’s vow to introduce reforms at an early date has been rising, especially among investors. Their skepticism has weighed heavily on Japan’s anemic stock markets.
Firms in L.A. suffer
NEW YORK (Kyodo) More than 70 percent of Japanese firms in the Los Angeles area have experienced downturns following the Sept. 11 terrorist attacks, according to a survey by the Japan External Trade Organization.
Fifty-two percent of firms responding to the survey said they have suffered “a severe impact” or “an impact they cannot ignore.”
More than 26 percent said they could not tell.
The survey, which polled 475 companies in the Los Angeles area on Sept. 17 and 18, with a 20 percent response rate, underscored the damage the terror attacks in New York and Washington have exacted on the U.S. economy through transport bottlenecks and a slump in consumer spending.
By business sector, the Japanese firms most affected by the terror attacks were in finance and insurance, at 71 percent, followed by transport at 67 percent. In tourism and other service industries, more than 57 percent of the firms said they had suffered a blow.
When asked to specify the type of damage inflicted, 45 percent of the companies cited delays and stoppages in sales and transport clogging the distribution of goods.
Thirty-seven percent of the firms pointed to cancellation of business talks, while 30 percent said diminished sales resulted from delays in supplies.
Other firms said they experienced a drop in sales from fewer customers visiting retail outlets and an increase in costs incurred by implementing alternative business strategies.