Bank Bill Submitted To Japan Gov’t
TOKYO (AP) _ Japan’s ruling party submitted a bill today to allow the government to use public money to bailout ailing banks.
Japanese banks, many of them among the world’s largest, are desperately in need of fresh capital to restore reserves lost from writing off bad loans and as a buffer against possible further losses.
The bill would establish the mechanism for injecting such capital into the debt-ridden banks.
Prime Minister Keizo Obuchi and his ruling Liberal Democratic Party have been under intense pressure from world leaders to move more aggressively to tackle the bad-loan crisis threatening the nation’s banks and contributing to Japan’s worsening recession.
The current extraordinary session of Parliament, originally scheduled to end today, was expected to be extended for nine days to give lawmakers time to deliberate the proposal.
But the bill were expected clear Parliament quickly after two opposition groups dropped their objections to the plan Tuesday.
The bank bill includes provisions that would allow the government to provide funds to both weak and healthy banks as a means for easing the nation’s credit crunch and to help strong lenders take over failed institutions.
Tokyo’s benchmark stock average soared today on hopes the laws will be approved soon and help strengthen banks, traders said.
The Nikkei average of 225 selected issues jumped 641.61 points, or 4.93 percent, in afternoon trading to 13,663.25.