The Financial System Council is recommending that corporate deposits for use in settling business transactions be protected after the introduction of a reduced guarantee scheme in April 2001.
The council, an advisory panel to the finance minister, offered the view in an interim report on the deposit protection system released Tuesday.
Under the new setup, the government will limit per- depositor protection to 10 million yen in case of bank failures.
But some government and Liberal Democratic Party officials have sought continued protection for corporate deposit accounts used to settle business deals.
Without special treatment for corporate accounts, they insist, a bank failure would open corporate customers to the threat of fund shortfalls and possible bankruptcy. And one bankruptcy, they argue, could cause a string of companies to go under.
In its report, the council admitted the need to study the possibility of fully protecting ordinary deposits and current deposits that individual and corporate savers use to fund settlements.