Japan still faces the possibility of financial crises despite the recent rebound in stock prices, and it needs to promote the disposal of bad loans, former chief White House economist Glenn Hubbard said Tuesday.
"I don't think that Resona is the last Japanese bank to be in trouble," Hubbard, former chairman of the White House Council of Economic Advisers, said in an interview.
At the end of June, the government injected 1.96 trillion yen in public funds into Resona Bank, the core unit of Resona Holdings Inc., to replenish its depleted capital base.
Resona Bank was forced to seek the government bailout because its capital adequacy ratio had plunged due to the sharp fall in stock prices earlier this year, the disposal of bad loans and stricter capital calculation standards.