1 March 2002, 08:55 Shiokawa - Govt cannot forcibly inject funds into banks
TOKYO (AFX-ASIA) - The government cannot forcibly pump funds into
banks to raise their capital despite the central bank governor's call
for injections by the end of March, Finance Minister Masajuro Shiokawa
said.
Bank of Japan governor Masaru Hayami "says it would be better to
make the injection by the end of the fiscal year, but we cannot make
forcible injections under the current law," Shiokawa said.
According to a law enacted last April, the prime minister can tap a
15 trln yen pool of funds, after calling a meeting of the Council for
Financial Crisis, made up of top ministers and officials, including the
BoJ governor if there is a risk of systemic failure.
The fund can be used for emergency injection of public funds into
financial institutions, to guarantee bank deposits or to take over a
collapsed entity.
Shiokawa said the government can only act if a bank is collapsing
or special investigation finds its capital at dangerously low levels.
"The Financial Services Agency says there is no such need (for the
public fund injection) at the moment. So, the forcible injection (of
funds) is impossible," he added.
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