A joint task force of the government and the ruling alliance on banks' bad loans agreed Thursday to submit several bills to the next Diet session in an attempt to facilitate an economic recovery.
An extraordinary Diet session is expected to be convened in late July to debate the bills. The council also agreed to set up a preparatory office next month for a government body that will mediate between creditors and borrowers in a bid to promote transactions in collateralized land, said Fukushiro Nukaga, parliamentary deputy chief Cabinet secretary.
Proposed bills will include a revision to the Law of Civil Execution to expedite land auctions, and the establishment of private firms to collect and manage problem loans for financial institutions.
The task force agreed that ministerial notices about corporate taxes should be issued in early June so banks can abandon their bad loans more easily, Nukaga said. Such notices are widely expected to grant greater tax exemptions to real estate-related writeoffs.
Reinforcement of the Cooperative Credit Purchasing Co. was also discussed, Nukaga added. Removing nonperforming loans from the banks' balance sheets is considered necessary to restore Japan's financial health. Higher tax exemptions for such writeoffs and promotion of transactions for collateralized land would also help hasten the disposal of bad loans.