Apparently convinced that bills to recapitalize financial institutions can be passed in the current Diet session, the ruling Liberal Democratic Party is set to submit the bills today.On Tuesday, the LDP presented a revised version of its new bank recapitalization scheme to the opposition camp, a scheme that was compiled taking into account opinions from the opposition camp. The LDP expects that the bills will receive support from the Social Democratic Party. It is also hoping for support from the Heiwa-Kaikaku parliamentary group and the Liberal Party.But it remains uncertain whether the LDP will get what it wants. Heiwa-Kaikaku acknowledges “certain progress” but says the LDP’s revised proposal has many shortcomings. The Democratic Party of Japan, the largest opposition party, remains firmly opposed to the LDP’s scheme, which imposes far more lenient conditions for using taxpayers’ money than a DPJ’s proposal.But in a sign that the dispute may be heading toward a conclusion, DPJ officials said they may not necessarily stick to their party’s proposal but instead offer amendments to the LDP legislation.The LDP’s idea is to promote realignment of the banking sector. But the DPJ has criticized the plan to inject taxpayers’ money into big internationally active banks, and the Heiwa-Kaikaku parliamentary group has called for the imposition of stricter conditions on the injection of public funds.The revised LDP scheme specifies some conditions for banks to meet before being able to receive public funds. For instance, recipient banks would have to draft restructuring plans, submit them to a regulatory authority and publicize them. Regular progress reports would have to be made.Concerning methods of evaluating banks’ stockholdings, the revised LDP proposal says that the current system of allowing banks to choose between the purchase price and market price should be maintained.
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