A top LDP policymaker said Thursday that the ongoing “Big Bang” reforms should be promoted but in a cautious manner to prevent further bankruptcies of financial institutions.

“I believe it would be better if streamlining and merger-and-acquisition of financial institutions were carried out in a way that doesn’t invite the collapse of financial firms,” said Taku Yamasaki, chief of the Liberal Democratic Party’s Policy Affairs Research Council.

Yamasaki made the remark in a lecture to the Research Institute of Japan; he was referring to considerable adverse effects on Hokkaido’s economy caused by the collapse of Hokkaido Takushoku Bank in November.

Hokkaido is suffering the most from the nation’s recession. The policymaker said the bankruptcy of Hokkaido’s key commercial bank has seriously affected industry. “The collapse of banks leads to destroying the manufacturing system. We should consider the possible effect on borrowers when money lenders collapse,” Yamasaki said.

His remarks differ from those made by LDP Secretary General Koichi Kato last month. While visiting the United States, Kato said more financial institutions could collapse as Japan’s financial sector undergoes reform.

Yamasaki said he and Kato have asked Prime Minister Ryutaro Hashimoto to open an extra Diet session as soon as possible after the July 12 Upper House election to deliberate bills for disposing nonperforming loans.

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