TOKYO, Dec 28 (Reuters) - The Japanese government should not allow any more bank failures, Eisuke Sakakibara, vice finance minister for international affairs said on Sunday. Rather, banks which are having difficulties should either restructure their business, change business managers or look for ways to survive such as merging with other financial institutions he added.
''The global standard is that we should not allow financial institutions of considerable size to fail, '' Sakakibara said on a national television show.
He said that Hokkaido Takushoku Bank Ltd (8312.T), which recently collapsed, should not have been allowed to fail.
Asked if Japan's financial crisis will become worse, Sakakibara said Tokyo should use its planned financial stability package which involves a maximum of 30 trillion yen ($230 billion) in public funds for use to stop it from getting worse.
''We must use this system as much as possible. I think 30 trillion is enough. We should implement this system steadily and as soon as possible,'' he said.
''We should make clear to the public that we will not allow banks to fail. We should not let securities companies of considerable size fail either. The United States and the United Kingdom have not done it either. This is the global standard,'' he said.
One of the key factors in the planned financial stability steps is a new fund to be set up within the semi-public Deposit Insurance Corp of Japan, which would make loans to healthy private banks to help strengthen their capital base , he added.
Sakakibara said it was up to politicians and bureaucrats to save banks from failing and it was up to banks to prevent companies from failing.
"We shouldn't let companies fail either," he said.
The Japanese economy's current problem was an internal one in that it has lost confidence in itself, he said.
''If we take measures and confidence is recovered, the economy will go well,'' he said.
It was important for the government to announce sweeping economic policies at one fell swoop, he said in response to a question about why stock prices kept on falling. |
