Heizo Takenaka, who led efforts to cut bad loans at Japanese banks, will oversee the breakup and sale of Japan Post, the world's biggest savings bank, seeking to spur the economy by unlocking $3.16 trillion in assets. Prime Minister Junichiro Koizumi picked Takenaka in a Cabinet reshuffle. Koizumi promoted Takenaka's deputy, Tatsuya Ito, 43, to be head of the Financial Services Agency. Takenaka kept his post as economic and fiscal policy minister. Koizumi wants to curb use of 350 trillion yen in postal savings to fund public works projects and free up more money for financing businesses. Takenaka's track record in forcing the biggest Japanese banks to halve their bad loans may help him overcome opposition within the Liberal Democratic Party.
``There is probably no one else who could, or would agree to take the job,'' said Akihide Kinugawa, who helps manage the equivalent of $19 billion as a fund manager at T&D Asset Management Co. in Tokyo. ``Tackling the banks was easy because they were unable to stand up to the government. Now he is taking on the LDP.'' Takenaka, 53, took over as minister for financial services on Sept. 30, 2002, describing the industry as ``seriously ill,'' and setting up a plan that called on the seven largest lenders, including Mizuho Financial Group Inc., to halve the level of their bad loans in the three years ending next March. ``Financial revival is essential for the Japanese economy,'' Takenaka, an economics professor who once taught at Harvard University, told reporters after his appointment. The seven lenders, which had 14 trillion yen ($126.5 billion) of soured loans as of March 31, may meet Takenaka's target six months ahead of schedule, Yoshifumi Nishikawa, head of the Japanese Bankers Association, said.
Deposit Protection
Ito, 43, has a law degree from Tokyo's Keio University, the alma mater of Koizumi. The Cabinet shuffle gives Ito six months to prepare for a lifting of the blanket government protection of bank deposits. Koizumi kept other key Cabinet posts unchanged. He retained Sadakazu Tanigaki, 59, as finance minister and Taro Aso, 64, as home affairs minister, which oversees operations at Japan Post. Shoichi Nakagawa, 51, remains minister of economy, trade and industry. ///www.bloomberg.com