The collapse of heavily indebted Japan Leasing Corp. will aggravate Japan's credit crunch, the nation's top economic planner said Tuesday.
"It is inevitable that financial institutions with outstanding credit will incur losses," Taichi Sakaiya, director general of the Economic Planning Agency, told a news conference. "There will be some financial institutions whose ability to lend money will decline."
With debts of 2.18 trillion yen, Japan Leasing, an affiliate of the ailing Long-Term Credit Bank of Japan, filed for court protection from creditors Sunday under the Corporate Rehabilitation Law.