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The government will finalize on July 8 the details of a plan to establish a state-backed bank to take over nonperforming loans from financial institutions, LDP Secretary General Koichi Kato said Monday.

The Liberal Democratic Party’s No. 2 man also told reporters that the framework of the scheme will be drafted by July 2.

Kato made the remarks after his meeting with Prime Minister Ryutaro Hashimoto at the Prime Minister’s Official Residence. Kato said he agreed with Hashimoto that depositors and borrowers who have been running businesses in a sound manner should be protected.

Kato said that the LDP and the government will use their time and energy to swiftly work out the scheme, even though the July 12 Upper House election’s official campaign kicks off Thursday.

Key figures in the government and the LDP are scheduled to meet this afternoon to start work on the details.

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