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Satoru Kishi, chairman of the Federation of Bankers Associations of Japan, expressed support Tuesday for the government’s plan to inject public money into ailing banks to prevent failures.

The use of public funds to rescue the nation’s banks has been a hotly contested issue in ongoing Diet debate. Opposition parties are demanding those banks pursue self-recovery or mergers without government help.

At a news conference Tuesday, Kishi, who is also president of the Bank of Tokyo-Mitsubishi, voiced concern about the potential impact of bank failures. “As we witnessed in the failure of Hokkaido Takushoku Bank, sound borrowers may suffer unexpected financial difficulties they are never responsible for,” he said. “Creating a framework to rescue banks in advance helps protect those borrowers,” he said.

Kishi nonetheless stressed that these steps should be applied only to those banks that can demonstrate a strong desire to regain creditworthiness through far-reaching structural reforms.

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