The House of Councilors enacted a law Wednesday to privatize the Development Bank of Japan.
To privatize the bank, the government will first establish a wholly owned subsidiary to take over the DBJ in October 2008 and then sell all shares in the new firm to complete the privatization in five to seven years.
The bank will keep its mainstay long-term business investment and lending services after it is privatized. Its investment and lending targets, while not outlined in the new law, are expected to focus on business projects considered too risky to be financed by conventional commercial banks.
During the privatization process, the bank will be allowed to borrow from the government and get government-guaranteed bond issues.