Financial Services Minister Hakuo Yanagisawa on Friday rejected a proposal by Finance Minister Masajuro Shiokawa for the state-run Resolution and Collection Corp. to buy bad loans from banks at higher-than-market value.
"That cannot be acceptable, as it involves many difficulties," Yanagisawa told a regular news conference.
Shiokawa's proposal, made earlier this week, attaches the condition that the government be allowed to tap the pool of deposit insurance premiums collected from banks in order to cover half the losses to be incurred by RCC as a result of the proposed step.