TOKYO (AFX-ASIA) - Senior Liberal Democratic Party member Ichizo Ohara said he will meet with Prime Minister Junichiro Koizumi and other members of the Cabinet to push for a public injection of funds for the banks.
"I will soon propose the measures to the prime minister, finance minister and minister of financial affairs to push for the enactment of my proposals," Ohara told AFX Asia.
He will also submit a paper outlining his proposals to Koizumi. According to the paper, Ohara's plans include a forced injection of public money into the banks, as well as the revaluation of so-called grey-area loans extended to firms whose borrowings risk turning sour or are near-bankrupt.
The injections of public money should be carried out through purchases of newly issued common-stock from the banks after they dispose of bad loans using their own capital.
The government will ensure that all loans to bankrupt or near-bankrupt firms are written off within two years, while grey-area loans that risk turning sour will be disposed of within three years, according to the proposal.