
| Japan Economy
Underfunded banks should try self help: official
TOKYO - Undercapitalized banks must try to increase their capital bases themselves before applying for injections of public funds, Hakuo Yanagisawa, chairman of the Financial Reconstruction Commission, said Friday. The comment indicated the government's growing reluctance to use tax money to help institutions that do little to improve their financial standing.
It is also considered the FRC chief's response to a plan at Kofuku Bank to apply for an injection of 60 billion yen in public funds. The capital adequacy ratio of the Osaka-based regional bank stands at a mere 0.5 percent, far below the minimum level of 4.0 percent required of financial institutions with no overseas operations.
''We do not intend to exclude undercapitalized banks from applying for public funds, but we will establish stricter standards for such institutions,'' Yanagisawa said. He stressed that Kofuku Bank's financial condition would be thoroughly scrutinized before the government decides whether to assist it.
(Asia Pulse/Nikkei)
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