The Financial Supervisory Agency will strongly urge banks to apply for capital injection under the new bank recapitalization law, FSA Commissioner Masaharu Hino said Tuesday.The FSA will use various measures, including meeting unofficially with a group of banks, to talk them into accepting public funds, Hino told a regular news conference. Hino’s remarks come as the long-waited banking laws, including the recapitalization law, are to take effect Friday. Most banks appear unwilling to apply for fear of having to take management responsibility.Capital injection must be based on voluntary applications from banks under the law. If banks remain reluctant to apply, the scheme to provide up to 25 trillion yen to banks may not be effectively used.In a conversation with Hino on Monday, Satoru Kishi, chairman of the Federation of Bankers Associations of Japan, reacted positively to the FSA’s intention to hold such meetings with small and major banks, Hino said. Kishi did not say whether his Bank of Tokyo-Mitsubishi will file an application for the fund injection, Hino added.Hino told reporters that banks should first announce that they will accept public money, even though technical problems such as banks’ internal rules must be cleared later on. Hino also urged banks to take radical restructuring measures now so they can make profits, warning that they will otherwise have to drop out.
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