Debate began Wednesday in the House of Representatives Finance Committee on two bills that form the backbone of government plans to infuse up to 30 trillion yen in public funds to stabilize the banking system.Finance Minister Hiroshi Mitsuzuka said “soul-searching is needed over the traditional administration of the financial sector,” which lacks transparency and protects financial firms from failing through stiff regulations.At the same time, he stressed the importance of solid policy decisions to avert any massive crisis in the banking industry, which would have serious consequences for the economy in general. Mitsuzuka also said he was aware of remarks made Tuesday by Koichi Kato, secretary general of the ruling Liberal Democratic Party, that the government’s fiscal reform timetable might be pushed back to place priority on stimulating the economy.”I stress that the basic position of the government (on securing fiscal reconsolidation) remains unchanged, but we are prepared to take all steps possible to avert a crisis situation” in the economy, he said in response to questions from committee members.Kato indicated in a speech in Tokyo that current plans to reduce the fiscal deficit to no more than 3 percent of gross domestic product and to stop issuing deficit-covering bonds by fiscal 2003 could be pushed back if the economy does not pick up steam with the pump-priming steps currently on the table.

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