Finance Minister Hiroshi Mitsuzuka expressed full confidence in the nation's financial health Friday, saying that the crisis is over and implementation of the government's stability measures will restore calm to the industry.
In his last regular press conference of the year, Mitsuzuka conveyed his belief that the financial crisis, which peaked in November with a string of failures including the collapse of the fourth largest brokerage, Yamaichi Securities Co., is basically over. "Ministry officials are currently working full-speed to prepare necessary legislation for the upcoming Diet session" to set up a legal framework for infusing up to 30 trillion yen in public assistance toward fully protecting deposits and helping to recapitalize banks up to March 2001.
The planned measures include giving the Deposit Insurance Corp. 10 trillion yen worth of government bonds redeemable upon request and extending 20 trillion yen worth of government guarantees to DIC borrowings from such lenders as the Bank of Japan. Of this amount, 13 trillion yen -- 3 trillion yen in bonds and 10 trillion yen in government loan guarantees -- will be set aside for capital injection through the purchase of preferred stock, while the remaining 17 trillion yen will be used to offer complete reimbursement of deposits at failed financial firms.
To realize this scheme, the Finance Ministry is preparing to submit a new Financial System Stabilization Law and a bill to revise the Deposit Insurance Law to the next ordinary Diet session, which begins Jan. 12. The enactment of such legislation will restore confidence to the financial sector, Mitsuzuka stressed.