The ruling Liberal Democratic Party formally submitted a new compromise plan to opposition parties Thursday afternoon on key financial stabilization bills, hoping to break a deadlock in negotiations.
The plan includes temporarily putting financial institutions under state control upon their request — as called for by the opposition.
The LDP, however, failed to offer compromises on major issues such as how to deal with the Long-Term Credit Bank of Japan and how much authority should be given to a planned “financial resuscitation committee” — an independent body proposed by the opposition camp.
While the LDP wants to conclude talks Thursday night by holding top-level discussions with the opposition on remaining issues, some opposition parties are demanding more clarification from the LDP before entrusting the matter to the top level.
“It is irresponsible for the LDP executives to make Prime Minister Keizo Obuchi decide on such important matters,” said a senior official of the Democratic Party of Japan. The LDP and the opposition camp were to meet again later Thursday afternoon for further talks.
In the new compromise, the LDP also gave in to an opposition demand for abolition of a financial stabilization law that allows the injection of public funds into weak but solvent banks to boost their capital bases.
The LDP, however, called for creating a new scheme that aims to shore up the capital bases at weak financial institutions.
A senior official of Shinto Heiwa (New Peace Party) expressed concerns over the proposal, saying the LDP may be only trying to create a new scheme similar to the recapitalization law.
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