The government and the Liberal Democratic Party appeared ready Friday to accept some ideas proposed by the Democratic Party of Japan on a bank recapitalization bill.DPJ Secretary General Tsutomu Hata met with his LDP counterpart Yoshiro Mori and Chief Cabinet Secretary Hiromu Nonaka in the afternoon and presented a set of amendment proposals to the LDP-drafted bill.One of the proposals called for setting up a 30 trillion yen account to fund the new bank recapitalization scheme — rather than 10 trillion yen as has been proposed by the LDP. In the DPJ’s plan, recipient banks would be required to set aside loan-loss reserves based on strict asset assessment and promote quick disposal of bad loans.Speaking at a news conference later in the day, Nonaka said that the government will be ready to take necessary budgetary steps in line with the DPJ’s request if the LDP agrees. Given the current critical condition of Japan’s financial system and its impact on the global financial system, he said, “I also believe it is necessary to prepare a considerable amount of money.” Mori also said that his party will positively consider the DPJ’s proposals, noting that the LDP has been and will remain ready to listen to good opinions.The SDP has been demanding, among other requirements, the inclusion of a clause requiring public fund recipient banks to submit a lending plan for small and medium-size enterprises as a means to lessen the credit crunch.
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