8 November 2001, 08:42 Yanagisawa sees no immediate fund injection for banks, except in crisis
TOKYO (AFX-ASIA) - Minister of Financial Affairs Hakuo Yanagisawa
said he believes there is no chance of an immediate capital infusion
into banks as a result of their disposal of bad loans, except in a
financial crisis.
"Banks' losses on bad-loan write-offs will be covered first by
operating profit," he told a parliamentary committee.
"Even if the losses affect their capital base, their financial
health will be examined under the existing regulatory early-warning
programme so a market infusion will not immediately take place," he
said.
"In the case of a financial crisis ... we will not hesitate to take
appropriate action, including the possibility of a capital infusion
into banks," Yanagisawa added.
"We are making efforts to deal with banks' bad-loan problems,
keeping in mind that banks' bad-loan ratio should be cut to below 4.0
pct three years after the start of the government write-off programme,"
he said.
A Financial Services Agency senior official told the committee that
an agency assessment published in May shows the nine major city banks
may post stock losses of 4 trln yen in a period of six months and 14
trln over a year.
© 1999-2024 Forex EuroClub
All rights reserved