Finance Minister Kiichi Miyazawa on Monday denied media reports that the United States has asked Japan to increase the amount of public money it has set aside to aid troubled financial institutions.
Speaking before a special committee of the Lower House, the finance chief said such a request did not come up during his weekend meeting with U.S. Treasury Secretary Robert Rubin in San Francisco.
But Miyazawa did indicate concern on the matter was shown, saying the U.S. side asked during preparatory talks for the bilateral meeting whether 13 trillion yen was enough. The Japanese side replied that it did not expect a shortfall, Miyazawa told the committee.
The 13 trillion yen is targeted at shoring up banks’ capital bases, and another 17 trillion yen has been set aside to help protect depositors at failed banks.
The Lower House committee began deliberations the same day on the financial system reform bills that have been submitted by the opposition camp in response to those submitted by the government and the ruling Liberal Democratic Party.
The two camps have agreed to meet today to begin talks to discuss possible compromises.
Okiharu Yasuoka of the LDP criticized the idea of forming an independent body, saying the government must maintain the responsibility of setting financial policy.
The creation of a tentatively named Financial Revival Committee has been proposed in a joint bill submitted by the Democratic Party of Japan, the Liberal Party and the Heiwa-Kaikaku parliamentary group. Under this plan, the committee would be able to place failed banks under public control.
Although the government’s “bridge bank” scheme would allow the government to take a similar step, the opposition says the plan would also allow nontransparent, arbitrary policymaking that the establishment is mired in to remain.
Yasuoka also questioned the opposition on its plan to nationalize banks by forcefully buying up their stock to prevent a failure from adversely impacting the system. Such a purchase would violate stockholders’ right to property, he said.
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.