Japan's economic recovery is extremely vital to the stability of Asian economies and the continued expansion of the global economy, Finance Minister Hiroshi Mitsuzuka said Monday in a speech at the opening of the year's regular Diet session.He added that it is the government's responsibility to take steps to support the domestic financial sector, whose failure would have an immediate and profound negative impact on markets worldwide. "The financial system forms the foundation of the national economy, and it would be impossible to achieve self-sustaining domestic growth or maintain the trust of global economic players without stability in this sector," Mitsuzuka said.To this end, the government has drawn up legislation that would make up to 30 trillion yen in public funds available to Deposit Insurance Corp. to help boost financial stability and fully protect depositors up to the end of March 2001, he explained. The legislation is to be submitted to the Diet during the newly opened session.Of the 30 trillion yen, 20 trillion yen would be in the form of government guarantees on loans to the DIC by institutions such as the Bank of Japan. The remaining 10 trillion yen would be given to the DIC in the form of government bonds that could be converted into cash if and when the corporation runs short of funds.The money would be used to ensure that deposits at failed banks would be fully reimbursed and to help inject fresh capital into financial institutions through the purchase of their preferred stock and subordinated bonds to strengthen their capital base.
