The government on Thursday formally approved a "bridge bank" plan to take over banks that fail and extend loans to their sound borrowers.
The plan was based on a draft approved and announced by the ruling Liberal Democratic Party earlier in the day. The government hopes to submit bills to implement the plan during an extraordinary Diet session to be convened later this month and pass them as early as September.
As the centerpiece of the package for resuscitating the ailing financial system, the bridge bank scheme is expected to help expedite the cleanup of problem loans; sour loans are the primary drag on the Japanese economy that is threatening to dampen the global economy as well.