Japan nears economy plan :: essays papers

Japan nears economy schemeTOKYO (Reuters) - Japanese policymakers drew ne arr Tuesday to an agreement on measures to unsay two long-standing obstacles to an economic rec everyplacey -- banks mountainous bad loans and stock market weakness. The ruling compression government is expected to finalize by Wednesday a package centering on steps to help banks dispose of their non-performing loans and a special fund to absorb sales of shares held by banks. While the deadline was self-imposed and officials have been reluctant to guarantee it would be met, at stake is the believability of political and financial leaders who have been unable to pull the solid ground out of economic doldrums for a decade. The countrys benchmark Nikkei share damage average, which shot up more than 3 percent at one(a) point Tuesday on optimism about the economic package, risks a retreat towards persist months 16-year lows if no credible deal is reached. One key point of lean has been whether taxpayers mo ney 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 in the public eye(predicate) funds into the body, saying government intervention in the market should be as limited as possible. But a member of the coalition panel studying the issue said the gap was narrowing. The FSA seemed to have leaned closer toward us, although there are still some differences, he told reporters. The coalition has changed the signalise of the proposed body to a fund to acquire banks shareholdings from a more unskilled stock-buying fund, specifying that the aim was to help banks unload massive shareholdings, losses in which are squeezing their capital adequacy ratios and throttling 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 ba nks shareholdings. The Nihon Keizai Shimbun financial daily reported in the first place this week that 15 trillion, or $119 billion, of funds from the state-backed banking safety net, the Deposit amends Corp., could be channeled to the proposed stock-buying body. The government is scheduled to hold a meeting of its arrest task force on economic measures Wednesday morning if agreement lav be reached with the ruling coalition parties on Tuesday, an LDP official said. Copyright 2001, CNN America, INC.