A key LDP policymaker balked Wednesday at a proposal to allow the state-run Resolution and Collection Corp. buy collateral-backed bad loans at effective book value.
"Nobody would step forward to buy them (at book value) at a time when their prices have dived to the current market prices," said Taro Aso, chairman of the Liberal Democratic Party's Policy Research Council.
If the RCC was obliged to buy the loans at effective book value, "it would be tantamount to the government funneling large amounts of taxpayers' funds into banks," Aso said.