FYI
Still No Plan for Japan Bank Reform
.c The Associated Press
TOKYO (Sept. 30) - The leader of Japan's main opposition group says disagreement within the ruling party is threatening to delay legislation aimed at fixing the nation's ailing banks.
Prime Minister Keizo Obuchi's ruling Liberal Democratic Party has yet to submit its proposal for how to strengthen banks whose financial condition has become dangerously weak, Naoto Kan, leader of the Democratic Party, said Wednesday.
''There is still confusion and a lack of consensus within the LDP,'' Kan said.
The legislation is controversial, even within the ruling party, because it would involve the use of public money to bail out private banks.
The delay by the ruling party in putting together a proposal meant the bank crisis legislation may not pass Parliament's lower house until next week, Kan said.
Meanwhile, Obuchi offered no indication of when his party would come up with its plan, saying only that the government wanted to draft and pass the legislation as soon as possible.
Lawmakers are hoping to pass a series of bank bills aimed at cleaning up the debt-ridden financial system and, ultimately, at rescuing Japan from its most stubborn recession since World War II.
Ruling and opposition parties have agreed on the basic outline of the plan but have yet to turn the agreement into law.
While they wrangle over the details, there are signs Japan's financial crisis is worsening.
The nation suffered the biggest corporate bankruptcy in its postwar history Monday when Japan Leasing Corp. announced it saw no way to escape from a crushing burden of bad debt.
On Wednesday, Moody's Investors Service cut its rating for the creditworthiness of Nomura Securities Co., Japan's top brokerage and one of the world's largest. The move was the latest indication that international trust in Japan's financial companies was deteriorating.
AP-NY-09-30-98 1147EDT
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