The ruling Liberal Democratic Party and the opposition camp agreed Tuesday to set up a forum to negotiate revisions of key financial stabilization bills. The forum is expected to start as early as Monday, LDP sources said.
While the Lower House special committee on financial stabilization is now debating government-sponsored bills, three opposition parties will submit their own joint bills on Thursday.
Although the LDP wanted to create the forum as soon as possible, the Democratic Party of Japan, the largest opposition party, insisted that negotiations start only after the bills drawn up by the DPJ, Shinto Heiwa and the Liberal Party are submitted.
The LDP and the government have expressed willingness to revise their bills in order to have them clear the Diet. The LDP needs opposition approval because it falls far short of a majority in the Upper House.
But it remains to be seen how the LDP will follow through on its pledge; there are big differences between its bills and the opposition’s.
One of the key differences is how failures of financial institutions would be decided. Under the LDP- and government-sponsored bills, the Financial Supervisory Agency would determine what constitutes a failure.
That’s where the dispute arises: Critics say the FSA is too close to the Finance Ministry, and the opposition’s bills will stipulate insolvency decisions are to be made by a body completely independent of the scandal-tainted ministry.
The opposition parties are also calling for abolishing financial stabilization laws that allow the Deposit Insurance Corp. to inject public funds into weak but not insolvent banks. The government is now attempting to use the laws to pump more public money into the ailing Long-Term Credit Bank of Japan.
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