TOKYO (AFX-ASIA) - Minister of Financial Affairs Hakuo Yanagisawa said Bank of Japan governor Masaru Hayami told him that the government should guide banks to increase their loan-loss reserves against bad loans.
"I had a discussion with the BoJ governor over the disposal of banks' non-performing loans" at a meeting of the government council on economic and fiscal policy held March 14, Yanagisawa said.
"The governor suggested the government should guide banks to raise their loan-loss reserves against non-performing loans, which require a close watch," he told an upper house budget committee meeting.
"I have rejected his suggestion at the moment because we have already instructed banks to make necessary loan-loss reserves under the rule for such bad loans," Yanagisawa said.