A Liberal Democratic Party subcommittee debating steps to stabilize the financial system basically agreed Wednesday on a broad outline that includes galvanizing Deposit Insurance Corp. and increasing the liquidity of financial institutions.
Further details, such as exactly how public funds might be infused into the financial sector, were to be discussed by a special task force headed by former Prime Minister Kiichi Miyazawa later so that a more specific package of financial stabilization measures can be released by the ruling party next week.
Miyazawa's group will have former Chief Cabinet Secretary Seiroku Kajiyama explain his proposal today to have the government issue a new type of bond to garner funds to help deal with the financial sector and boost the economy.
The collateral for the bonds would be government-held shares of such companies as NTT Corp. and Japan Tobacco Inc., which would later be sold. Participants at the morning meeting said such a plan should not run counter to the government's efforts to slash the fiscal deficit and reduce deficit-covering bond issues, LDP lawmakers said.
The LDP plan due to be announced next week is expected to include boosting the resources of DIC through such means as offering government guarantees and raising deposit insurance premiums collected from financial institutions.
The party is also looking into ways to strengthen the operations of debt-reclaiming bodies such as Resolution and Collection Bank and to pave the way for establishment of private-sector firms to undertake such business.