The ruling Liberal Democratic Party, the Social Democratic Party and New Party Sakigake agreed Sept. 10 on a plan to streamline government-affiliated financial institutions.

Under the plan, the Japan Development Bank would give up its key service of extending low-interest loans to big businesses in major industries. The bank, established in 1951, says it has accomplished its initial goal of fostering growth of industries in the postwar era.

A new public financial entity would be set up to take over some tasks currently held by the JDB, such as extending loans for local infrastructure, providing funds for environmental protection, funding antidisaster measures and fostering new industries. The review of government-affiliated financial institutions has been urged as part of the reform of public corporations, which are often criticized for wasting public money, inefficiency, opaque management and for hampering private-sector activities.

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