Roebear, lots of news hitting the wire - on how governments plan to use taxpayer money to support the system - it looks as though the bears own the news services this morning.
Regards
Frank P.
UK FSA Chief: Japan's Banks Need Cap Injection - Kyodo
09:08 GMT-05:00 Wednesday, March 27, 2002
NEW YORK -(Dow Jones)- A top U.K. financial regulator on Wednesday urged Tokyo to inject public money into Japanese banks to bolster their capital if necessary to fix the nonperforming loan problem, Kyodo News agency reported.
"There is undoubtedly a need for a capital injection," Howard Davies, chairman of the U.K. Financial Services Authority, said in a speech in Tokyo.
"Bankers are, sadly, never very popular recipients of public funds. But sometimes it is necessary to provide funding, through the banking system, to help the economy as a whole," he said.
Davies is in Japan to exchange views on financial issues with his Japanese counterparts, Kyodo reported.
He said resolving the nonperforming loan problem is essential to restore growth in Japan, and that growth will in turn help prevent increases of new sour loans.
"It is generally accepted that the problems of the banking system will need to be effectively addressed if healthy growth is to resume. And the core of that issue remains the nonperforming loan problem," Davies said.
"The difficulty is that new nonperforming loans have emerged in the system as rapidly as the banks have been able to write off their unhappy inheritance."
The Japanese government is placing top priority on the disposal of nonperforming loans to restore the health of the Japanese economy.
It believes injecting public money into banks is unnecessary now, but has said it is prepared to do so if necessary, Kyodo reported.
Davies said the U.K. is greatly interested in Japan's bad-loan problem, which he said has a negative impact on the U.K. economy.
"The Japanese financial crisis has been strongly felt in London, in a number of ways... So we have a very strong interest in the restoration of a healthy and ambitious Japanese financial sector, both at home and overseas," he said.
He also said it is important for Japanese banks to increase profitability and for the Japanese Financial Services Agency to have an explicit recognition of the scale of the problem to effectively solve it, Kyodo reported.
Dow Jones Newswires |
