The government will consider exerting control over banks that have received public funds if their capital adequacy ratios dip below half of the minimum requirements, the Financial Reconstruction Commission said Tuesday.
Guidelines released by the FRC also will enable the government to intervene in the management of banks if market confidence in the banks significantly declines regardless of their capital ratios.
The FRC spelled out the guidelines to deal with preferred stocks acquired by the government from 15 major banks in March as a form of capital injections totaling 7.46 trillion yen. Of that figure, 5.56 trillion yen went to buy convertible preferred stocks.
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