TOKYO (AFX-ASIA) - The Financial Services Agency said it will propose to the Ministry of Finance that it set up from January a body to buy banks' cross-shareholdings. The body will have a capitalisation of at least 10 bln yen, provided by members of the body, including banks, long-term credit banks, bank holding companies and others. It will come under the supervision of the government and exist until the end of September 2006. The proposals are part of the agency's budget request to the ministry for the year to March 2003. Under the plans, the body will buy stocks from member banks to resell them to brokerage companies that plan to issue exchange-traded funds, as well as to non-banking corporations who want to buy back their own stock. In addition, the body will buy stocks and place them with trust banks. The agency will propose that the government guarantees loans raised by the entity to purchase the banks' stocks, providing 2 trln yen in such loan guarantees in the budget for the year to March 2003. In addition, the FSA will consider tax breaks for the body if it posts losses from stock holdings. The agency added that the proposals would limit banks' stock holdings to below the level of their Tier-1 capital, effective from 2004.