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To: Sarmad Y. Hermiz who wrote (127545)	6/30/2001 1:13:11 PM
From: H James Morris	Read Replies (1) \| Respond to of 164684

> Or just learning to admit error, and move on. Take a lesson from Japans banks, then you'll have no problem admitting an error and moving on. >June 30, 2001 TOKYO -- Japan's central bank can help the nation's banks dispose of their huge bad loans by using monetary policy to prevent deflation and stabilize the deteriorating economy, the economy minister said yesterday. Economic Minister Heizo Takenaka said falling prices pose a problem for banks trying to wipe out their sour loans because it hurts corporate profits and depresses land values. That could force more companies into bankruptcy, inflating banks' already enormous bad loans. "If the Bank of Japan can use monetary policy to control prices, it should consider it," he said. "But that is up to the central bank." The problem loans -- which some government officials estimate at 82 trillion yen ($661 billion) -- have weighed on Japanese bank profits since the economic boom ended 10 years ago. Japan, the world's second largest economy, has been unable to break out of its most stubborn economic slowdown since World War II. The economy got another jolt yesterday when the government announced that the unemployment rate in May edged up to 4.9 percent, matching the record high last hit early this year. Higher unemployment is particularly worrisome as it dampens consumer spending, a key growth engine for an economy slowing because of declining exports and shrinking industrial output. The jobless rate rose in May mainly because of sharp declines in the number of self-employed workers and people employed by small firms. The jobless rate also hit 4.9 percent in December 2000 and January of this year. The rate stood at 4.8 percent in April and 4.7 percent in February and March. Labor conditions in Japan are expected to worsen as Prime Minister Junichiro Koizumi begins to carry out his economic reform plan later this year. The plan is designed to cure the ailing economy with tough reforms by clearing up the bad debts choking the financial system, trimming government spending and reducing the public sector's role in the economy.