After weeks of intense negotiations between the Liberal Democratic Party and the opposition camp, key financial reform bills designed to fix Japan’s banking sector woes cleared the Lower House Friday evening.The bills were sent immediately to the Upper House and could become law as early as next Friday.After the Lower House passed the bills, Naoto Kan, president of the Democratic Party of Japan, the largest opposition force, told reporters it was an epoch-making moment in Japanese politics.”It was epoch-making not only because the bills were based on those drawn up by the opposition camp, but also because lawmakers actually drew up the bills without depending on bureaucrats,” Kan said. “It showed that the Diet actually functions as a policymaking body.”The Lower House passage of the bills and the anticipated enactment by the Upper House will give Prime Minister Keizo Obuchi breathing room because the stalemate over the banking reform might have endangered the fate of his two-month-old administration.Still, the handling of the banking bills reminded his government and the LDP that the ruling party must compromise with the opposition camp on key legislation because of its lack of majority in the Upper House.Because opposition parties in the Upper House are demanding 30 hours of committee debate, the LDP plans to extend the session, originally scheduled to end Wednesday, by about 10 days.With the extension, the LDP also hopes bank recapitalization legislation can be passed. After being approved by a Lower House special committee on financial system stabilization in the afternoon, a total of eight financial-related bills, including the much-discussed financial reform bills, were approved at the plenary session of the Lower House with support mainly from the LDP, the DPJ, the Heiwa-Kaikaku parliamentary group, and the Social Democratic Party.The Liberal Party and the Japanese Communist Party voted against the bills. The four financial reform bills, which are based on those drawn up by the Democratic Party of Japan, the Heiwa-Kaikaku parliamentary group and the Liberal Party, call for creating a “financial resuscitation” committee, an independent financial supervisory agency, to deal with failing financial institutions.

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