According to the Financial Times, Heizo Takenaka, Japan's economics and financial services minister, continued a frantic round of diplomacy on Monday as he sought to secure the backing of bankers and politicians for his plan to revive the financial sector ahead of its possible release later this week. I'm on tenterhooks.
The newly-appointed banking tsar held his third emergency meeting with the leaders of Japan's seven largest banks in an attempt to placate them, although it is understood the meeting - like the two previous gatherings - did not go well. Mr Takenaka on Monday also sought to appease members of the three party coalition government who forced him to abort publication of his plan last week and have since been openly criticising both him and his proposals. Adding to the air of uncertainty is speculation over the outcome of the next monthly meeting of the nine-member policy board of the Bank of Japan, which begins on Wednesday.
The central bank played a key role creating the current proposals to reform the banks after its decision to purchase stocks directly from banks led to the sacking of Hakuo Yanagisawa, the former financial services minister.With opposition mounting to the more controversial aspects of Mr Takenaka's proposals, there are strong signs the harder edges of the package are in the process of being worn away and replaced with compromise solutions. While the content of the plan is changing regularly, it is understood Mr Takenaka has agreed to delay a more strict treatment of deferred tax assets by the banks by at least a year and possibly until 2004.
Source: Financial Times