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To: Arthur Radley who wrote (16259)	9/6/1998 2:46:00 PM
From: Glenn D. Rudolph	Read Replies (1) \| Respond to of 164684

U.S. TELLS JAPAN Y13 TRILLION MAY NOT BE ENOUGH FOR BANKS Futures World News - September 05, 1998 03:33 %TREASURY %STOCK %FINANCIAL %CURRENCY %ECONOMY V%FWN P%FWN San Francisco-Sept. 5-FWN--U.S. FINANCE OFFICIALS TOLD their Japanese counterparts on Friday that the Y13 trillion yen earmarked to recapitalize Japanese banks may not be enough. The message came during the meetings between U.S. Treasury officials and Japanese Finance Ministry officials, said Eisuke Sakakibara, Japanese vice finance minister, in a briefing to reporters here. If the funds are not sufficient, Japan will provide additional funds. However, that would involve further negotiations with opposing political parties. Currently, banking reform legislation is pending in the Diet and it is unlikely the legislation will be passed any time soon. Sakakibara said Japanese Finance Minister Kiichi Miyazawa pledged that Japan will continue doing what is necessary to rebuild its economy. Conversations also focused on the perception gap between the United States and Japan about how serious its economic situation is. Sakakibara pointed out that the ordinary Japanese people don't know Japan is in a financial crisis. He said U.S. Federal Reserve Chairman Alan Greenspan made the comment that some day, ordinary people will have a sense of urgency, but at that time, it will be too late. It is a feeling within the U.S. government there is a perception difference between how the world perceives Japan's economic situation and how that same situation is perceived by the Japanese. Sakakibara pointed out the financial crises in Russia and Latin America are not directly related to the Japanese crisis. He noted that when the United States talks about a crisis in Latin America or Russia, it has to think about the responsibility, not only of Japan, but of other Group-of- Seven countries. U.S. officials, while not blaming Japan for the financial crises, have been stressing Japan is part of the solution. As the world's second-largest economy, it would greatly help matters if Japan could get back on track. Greenspan joined Japanese finance officials for dinner on Friday. Sakakibara said the global financial crisis was discussed. Greenspan said regulation of short-term capital flows is not a solution for the financial markets. Miyazawa said there might be a solution between no regulation and regulation.