26 February 2002, 09:25  Shiokawa to ask BoJ to raise outright JGB purchases to 1 trln yen

TOKYO (AFX-ASIA) - Finance Minister Masajuro Shiokawa said he will ask Bank of Japan governor Masaru Hayami to increase the bank's monthly outright purchases of government bonds to 1 trln yen from 800 bln yen. Shiokawa said he will make the request at the scheduled meeting of the Council on Economic and Fiscal Policy to discuss anti-deflation measures tomorrow evening, the day before the bank's policy board meeting. "I will directly ask the BoJ governor for an increase in outright purchases of government bonds to 1 trln yen per month when I meet him at the meeting tomorrow evening," he told a regular press briefing. Shiokawa said the government has not reached an accord on the timing for an injection of public funds into banks. "I have not heard about that from the ministry responsible for the matter but I think some time in the near future an agreement on how to decide the timing of the capital injections will emerge," he said. "Now is the time the government should make sure how the result of the special inspections into banks are reflected into financial policy but at this moment this debate among ministers remains vague," he said. Shiokawa expressed concerns over recent moves by major banks to bailout large retailers and construction companies. "We have seen Daiei, as well as the Mitsui, Sumitomo and Fujita construction companies, rescued by their major banks, who are dealing with bad loan disposals," Shiokawa said. "But I have questions over the attitudes (of) the major banks towards these companies. Smaller companies are facing financial troubles because banks are asking them to repay debt," he said. "Major banks should disclose the conditions for providing help to companies," he added.

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