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The LDP task force tackling the nation’s bad loan problem agreed Monday that planned state-controlled “bridge banks” must be temporary entities.

The proposed banks would extend loans to relatively sound borrowers of failed banks, thus preventing a bank failure from triggering failures at corporate customers.

The panel also agreed that the idea of nationalizing the bridge banks should be considered positively, said Nobuteru Ishihara, a key panel member, after the day’s task force meeting.

Taku Yamasaki, chairman of the Liberal Democratic Party’s policy research council, and Okiharu Yasuoka, task force leader, will report on the intra-party discussions to Prime Minister Ryutaro Hashimoto today, Ishihara told reporters. Hashimoto may then give specific instructions, he added.

The panel plans to release a draft of the bridge-bank plan on Thursday that is likely to constitute the basis of a formal plan, which the government aims to complete by Friday.

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