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Japan to take new line on bank debts

Thursday 03 August 1995 18:02 EDT
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Japan will introduce a new policy in October to tackle its banking system's chronic bad-debt problem, according to Yoshimasa Nishimura, director general of the Ministry of Finance's banking bureau. Although he stuck to the government's line that no public money would be spent on bailing out the banks, he did discuss the use of public funds as a catalyst.

The European credit rating agency IBCA said that the Ministry of Finance "is engaged in a long-term effort to ensure a consensus that public money will have to be used to support some troubled financial institutions". IBCA estimates that a total of 20,000bn (pounds 138bn) will have to be committed to cleanse the banking system of bad debts.

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