Banks told to keep aiding the ailing

Kyodo

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.