Financial Reconstruction Minister Hakuo Yanagisawa again urged banks to apply for a big capital injection Thursday, the day before the Financial Supervisory Agency was to explain application approval standards to 147 banks in Tokyo.
“I hope banks will apply for a drastically large amount,” Yanagisawa told a hastily arranged news conference. Through restructuring banks should consider their expected better financial position that will enable them to repay the public funds and the significance of the last Diet session, which resulted in the bank recapitalization law, he said.
If applicant banks come up with aggressive restructuring plans to increase profitability, as required under the screening standards, they could also have favorable conditions for recapitalization, he explained.
In saying so, he tried to ease concerns held by banks over conditions such as the required stock dividend rates to be purchased by the government. For instance, the rates could be lower for banks that appear likely to be more profitable in the future.
Yanagisawa implied he hopes banks will apply for a combined sum of at least 3.6 trillion yen, or double the amount that was injected to 21 banks, including 19 major ones, in the last capital injection the government made in March.
Under the new bank recapitalization law, a 25 trillion yen fund has been set aside, compared to 13 trillion yen prepared for the March scheme.
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