In a reversal of his earlier comments, Finance Minister Masajuro Shiokawa said Wednesday a new entity to be established to help debt-ridden but potentially viable companies will take over credits at such corporations regardless of their size.
Shiokawa, who said at a House of Representatives committee Tuesday that the new body for industrial revival will mainly take over credits to big firms from banks, said the system will not be limited to big companies, although some differences are expected between resuscitation efforts for big and small firms.
“We can’t follow the same standard for small and midsize companies as well as big corporations. The standards will naturally be different,” Shiokawa said at the same Lower House committee.
The institution will take over loans to companies the government determines to be “viable” in a bid to resuscitate them.
In contrast, the existing Resolution and Collection Corp., another institution under the Deposit Insurance Corp., buys the loans of companies with little chance of revival.
The creation of the new institution is an integral part of a package of steps compiled recently to accelerate the cleanup of nonperforming loans at banks and combat deflationary pressures that are expected to accompany the move.
Shiokawa’s previous remarks drew criticism from lawmakers, who claimed that the body should not be seen as an institution that will only assist big companies deemed too large to fail and leave smaller enterprises out in the cold.
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