Japanese financial regulators said Thursday that they will continue to require banks to maintain support for smaller companies struggling to turn around their businesses, even after a relevant law stipulating rescue measures expires.
Releasing a written statement, financial services minister Ikko Nakatsuka warned commercial lenders not to withdraw their loans or apply stricter lending terms to distressed small and medium-sized firms immediately after the law becomes invalid in March.
In exchange for commercial lenders' continued support for these firms, regulators will keep in place a special arrangement that allows financial institutions to exclude from their list of bad loans any lending to companies that are making adequate efforts to turn themselves around.