COPENHAGEN – Finance Minister Masajuro Shiokawa pledged Friday that Japan would make efforts to reduce the number of domestic banks through accelerated restructuring measures as Asian and European finance ministers gathered in Copenhagen for two days of talks, a Japanese official said.
Briefing his Asia-Europe Meeting counterparts on Japan’s economic situation, Shiokawa emphasized the need for Japan to have unprofitable banks halt business or merge with other institutions, the official said.
Shiokawa also vowed to accelerate the disposal of bad loans at banks under the terms of special bank-loan inspections conducted between October and the end of March, the official said.
The Japanese economy has bottomed out thanks to a rise in exports and an end to corporate inventory adjustment, but there is a possibility that the severe employment and income situation could result in a fall in demand, Shiokawa was quoted as saying at the meeting.
David Robinson, senior adviser in the Research Department of the International Monetary Fund, who made a keynote speech at the meeting, called on Japan to expand its quantitative monetary easing to end deflation at an early date, the Japanese official said.
Robinson urged Japan to improve productivity through the restructuring of its corporate and banking sectors. With a rapidly aging population, Japan is facing challenges, such as growing social security costs, the IMF official also pointed out.
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