Naoto Kan, president of the Democratic Party of Japan, called on the government and the ruling Liberal Democratic Party Wednesday to establish clear rules for dealing with the ailing Long-Term Credit Bank of Japan, indicating he is not necessarily opposed to the injection of public funds to save the bank from collapse.

Kan, however, reiterated at a regular news conference that his party is against the current government plan of pumping public money into the LTCB without full disclosure of its nonperforming loans.

“We cannot approve what the government is trying to do (with the LTCB), which is not based on concrete rules. We are concerned that something will happen to other major banks and public money will be used without limit,” Kan told the press.

While financial legislation drawn up by the DPJ, Shinto Heiwa (New Peace Party) and the Liberal Party includes abolishing financial legislation laws that allow the use of public funds to boost the capital bases of weak but not insolvent banks, Kan said the LTCB issue should be discussed separately from the financial bills now on the table.

He said it is necessary to establish some rules that can apply to major banks before they fail, adding that the DPJ is ready to discuss the matter if the LDP comes up with some proposals.

In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.