Japan will adhere to its goal of disposing of banks' nonperforming loans within three years, Prime Minister Junichiro Koizumi told U.S. President George W. Bush on Tuesday.

Speaking before reporters after meeting with Bush, Koizumi said he clarified to the president Japan's policy on resolving the bad-loan issue.

"Our government's policy toward structural reform is unwavering," Koizumi said in reply to Bush's request for Japan to carry out the promised structural reform as a means to revive its diseased economy. The request includes aggressive disposal of the bad loans that have paralyzed the banking sector since the burst of the bubble economy in the early 1990s.

The prime minister indicated the government will use the state-run Resolution and Collection Corp. to promote the disposal of nonperforming loans.