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Three opposition parties on Thursday submitted their prescription for the nation’s ailing financial system, setting the stage for a showdown with the LDP.

The Democratic Party of Japan, Shinto Heiwa (New Peace Party) and the Liberal Party presented four bills to a plenary session of the Lower House, which forwarded them to a special committee on financial stabilization for deliberation.

Actual negotiations between the opposition parties and the Liberal Democratic Party — which, together with the government, has submitted six bills dealing with the nation’s financial crunch — are expected to start as early as Monday.

In recent days, key opposition players such as DPJ leader Naoto Kan have hinted at a willingness to discuss the LDP proposals. Because the LDP lacks a majority in the Upper House and due to the urgency of the situation, the government and the LDP have said they are willing to compromise with the opposition. But it remains to be seen how they will keep that pledge when it comes down to bridging the wide differences between the two sets of bills.

After submitting the bills to Lower House Speaker Soichiro Ito Thursday morning, Eisei Ito, the DPJ’s policy affairs chief, told reporters he was happy the three parties were able to team up on the proposed legislation. “Now we want to cooperate further in securing their Diet passage,” Ito said.

The main pillar of the opposition’s bills — and the main point of contention with the LDP — concerns how authorities would handle bank failures. The opposition is calling for a body completely independent of the Finance Ministry to deal with failed financial institutions.

The body would be established as a bureau affiliated with the Prime Minister’s Office and be given authority to manage the financial system. It would have the same degree of independence as such entities as the Fair Trade Commission.

Government and LDP officials are critical of the idea, saying the financial system should be controlled by a government ministry.

Under the opposition’s plan, the independent body would concentrate on implementing measures to deal with bank failures. The measures would be based on certain principles, such as forcing failed institutions to disclose bad loan information and allowing the failure of banks that are too weak to stay in business.

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