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The nation’s major and regional banks estimate they have accumulated 76.71 trillion yen in potentially sour loans, the Finance Ministry said Monday.The amount, calculated under different standards than those used by the ministry, was about 3.5 times greater than 21.73 trillion yen reported by the ministry last month for the banks as of the end of September.Monday’s figures were tallied from bad loan assessments made by the individual banks and do not reflect nonperforming loans as of a set date, ministry officials explained. Roughly 2.7 trillion yen worth of credit supplied by the banks was classified as “type four,” or loans determined to be irrecoverable.Another 8.72 trillion yen was put into the “type three” category, indicating there is considerable doubt whether the loans could be reclaimed. The remaining 65.29 trillion yen in loans and credit was classified as “type two,” meaning that the loans are problem-free as long as the banks use caution in managing them, the ministry officials said. “This figure in its entirety should not be considered as loans having gone sour altogether at this stage,” one official stressed.The banks reported a total 624.86 trillion yen in loans and guarantees. Because each bank uses its own standards, loans made to a particular borrower may be ranked differently, the official said.The ministry decided to release the bad-loan figures ahead of upcoming Diet debate expected over the government’s plan to enact legislation to stabilize the financial sector. The plan calls for the use of up to 30 trillion yen in public funds to inject capital into banks and fully protect deposits up to March 2001.

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