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Friday, October 25, 2002


Japan's economy minister doesn't seem to be getting much rest these days. According to the latest news from Tokyo:

Financial Services Minister Heizo Takenaka said Friday he will meet again with top executives of Japan's major banks to discuss steps to accelerate the disposal of nonperforming loans."I want to talk more about various issues" with the top executives, Takenaka said during a regular news conference. Government officials said a meeting between Takenaka and the bank officials is likely to take place later in the day.
Source: Japan Today

The latest meeting follows his apology yesterday in the Japanese parliament. "I will be careful in future," he is reported as saying to meeting of the lower house budget committee, referring to the sharp fall in share prices after his initial remarks about the bad debt problem. According to the Financial Times:

Mr Takenaka told the budget committee that he had postponed the announcement of his plan to accelerate the disposal of bad loans this week after objections from members of the ruling Liberal Democratic party. His proposal, which calls for drastic action to clean up banks, would now be rolled into a broader "anti-deflation" package, expected to be released next week.

"We had to deal with the safety net issue at the same time," said Mr Takenaka, referring to an array of measures designed to offset the likely recessionary impact of aggressive action on the banks. Yesterday, a report by Nikko Salomon Smith Barney suggested that more rigorous appraisal of banks' bad loans could push real gross domestic product down 3.4 per cent over two years and affect 2.4m workers. The delay has led many commentators to conclude that Mr Takenaka will be forced to water down his proposals. But Takao Toshikawa, a prominent political analyst, said he thought the bulk of his strategy would survive. "The original plan should be promoted and carried out because Mr Koizumi has already endorsed it."
Source: Financial Times

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