Prime Minister Keizo Obuchi denied media reports Thursday that the government has decided to inject public funds into the ailing Long-Term Credit Bank of Japan to expedite LTCB’s proposed merger with Sumitomo Trust & Banking Co.
Obuchi told the Upper House Budget Committee that the Financial Supervisory Agency is currently inspecting LTCB to assess the health of its assets, but noted that he has yet to receive an interim report on the matter. “There is no fact” to the media reports, he said in response to questions from Kiyoshi Imai of the Democratic Party of Japan.
Media reports said the government would use public funds as part of an effort to smooth the way for LTCB’s merger with Sumitomo Trust, which was reportedly proceeding slower than expected.
Finance Minister Kiichi Miyazawa meanwhile said that under no circumstances would extra legal measures be taken for the troubled bank, indicating no public funds would be injected into LTCB without screening by a special panel under Deposit Insurance Corp.
Obuchi also acknowledged that the economic policies of the Cabinet of his predecessor, Ryutaro Hashimoto, were tardy in being carried out and helped lead to the current economic slowdown.
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