Japan nears economy plan :: essays papers

Japan nears economy planTOKYO (Reuters) - Japanese policymakers drew surrounding(prenominal) Tuesday to an agreement on measures to remove two long-standing obstacles to an sparing recovery -- banks hilly bad loans and stock market weakness. The ruling coalition government is pass judgment to finalize by Wednesday a package centering on go to help banks dispose of their non-performing loans and a special fund to absorb gross revenue of shares held by banks. While the deadline was self-imposed and officials stomach been reluctant to guarantee it would be met, at stake is the credibility of political and fiscal leaders who have been unable to pull the nation out of economic doldrums for a decade. The countrys benchmark Nikkei share price average, which shot up more than 3 percent at one point Tuesday on optimism about the economic package, risks a retreat towards last months 16-year lows if no credible deal is reached. oneness key point of contention has been whether taxpayers money should be used by a proposed fund to buy shares from banks. The Financial Services Agency (FSA), Japans financial regulator, had been reluctant to channel public capital into the body, saying government handling in the market should be as limited as possible. however a member of the coalition panel studying the issue give tongue to the gap was narrowing. The FSA seemed to have leaned closer toward us, although there are still well-nigh differences, he told reporters. The coalition has changed the name of the proposed body to a fund to buzz off banks share puddleings from a more crude stock-buying fund, specifying that the aim was to help banks unload huge shareholdings, losses in which are squeezing their capital adequacy ratios and hold lending. The banks have built up huge portfolios of shares in group companies and their clients as a means to cement business ties, but the drop in Japanese share prices over the last decade has brought calls to limit banks sharehol dings. The Nihon Keizai Shimbun financial daily reported earlier this week that 15 trillion, or $119 billion, of funds from the state-backed banking safety net, the Deposit Insurance Corp., could be channeled to the proposed stock-buying body. The government is scheduled to hold a meeting of its emergency task force on economic measures Wednesday morning if agreement can be reached with the ruling coalition parties on Tuesday, an LDP official said. Copyright 2001, CNN America, INC.