Prime Minister Ryutaro Hashimoto on Friday gave an LDP task force until Sunday to work out details for a special bank to protect corporate borrowers whose banks might fail.
The panel will examine several plans being floated, including one for a U.S.-style “bridge bank” that would temporarily take over failed banks and extend loans to their borrowers, said Okiharu Yasuoka, head of the panel.
It was unclear, however, if the panel can reach a conclusion at its Sunday meeting, Yasuoka said.
Finance Ministry officials are expected to brief the panel on specific issues, including the lending function of a special bank and ways to finance and manage the bank.
Based on discussions within the Liberal Democratic Party, the government hopes to have a clear picture of the special bank as early as possible in July.
The proposed bank is currently the centerpiece of a package of measures to resuscitate the nation’s financial system, which is burdened by massive amounts of bad loans.
Hashimoto ordered Yasuoka to expedite the LDP efforts during a meeting at the Prime Minister’s Official Residence. Other participants included Finance Minister Hikaru Matsunaga and Masaharu Hino, commissioner of the Financial Supervisory Agency.
They did not discuss possible use of the special bank to help the ailing Long-Term Credit Bank of Japan and Sumitomo Trust & Banking Co. in their reported planned merger, according to the participants.
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