The new supervisory finance agency to emerge from the reorganization of the Finance Ministry will be in charge of taking the initial steps for handling failures of financial institutions, according to a paper released by the Prime Minister's Office.
The "Financial Supervision Agency" is planned to be set up as soon as possible and no later than July 1998. Its director general will be appointed by the prime minister and given authority to supervise private-sector financial institutions, according to the paper, which is the backbone of a bill to create the agency. The bill will be presented before the current Diet session.
As for regular policymaking regarding finance and securities transactions, such as the issue of licenses, such duties will remain the domain of the Finance Ministry. The Finance Ministry will also continue to supervise the Deposit Insurance Corp.