The Financial Reconstruction Commission, the predecessor of the Financial Services Agency, set out to push through a major reorganization of 17 major banks immediately after its inauguration in December 1998, according to minutes of the FRC’s meetings disclosed Friday by the FSA.

The FRC, a government agency that was disbanded in January and replaced by the FSA, was charged with disposing of failed financial institutions and helping major banks strengthen their capital bases.

According to the minutes of its first seven meetings between December 1998 and January 1999, the FRC also conducted a detailed study to devise a standard for injecting public funds into banks to bolster their weak capital bases.

The minutes, which were published at the request of Kyodo News under the Information Disclosure Law, are the first minutes of FRC meetings ever to be made public.

The minutes show the FRC wanted banks that had requested injections of public funds to write off bad loans incurred during the bubble economy era.

The FRC commissioners were generally skeptical about moves by banks to forgive their loans to troubled corporate borrowers such as construction companies.

During one meeting, a commissioner said there were too many major banks in Japan, while another commissioner said he wanted banks that were uncompetitive to disappear from the market.

During the two years of its existence, the FRC helped a total of 25 banks boost their capital with injections of public money. The group held a total of 216 meetings over the two years.

The minutes of the other meetings are expected to be published sequentially by the end of next March, FSA officials said.

In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.