News Briefs

Japan and the IMF





News Brief No. 98/23
July 2, 1998
International Monetary Fund
700 19th Street, NW
Washington, D.C. 20431 USA

IMF Acting Managing Director Welcomes New Japanese Banking Initiatives

The Acting Managing Director of the International Monetary Fund (IMF), Stanley Fischer, welcomes the banking sector initiatives announced today by the Japanese Government in its Second Report on the Comprehensive Plan for Financial Restructuring. These initiatives mark further steps toward a comprehensive approach to resolving Japan’s banking problems, the critical task if Japan is to return quickly to sustained growth.

The new bridge bank facility provides a potentially valuable means for resolving failed institutions in an orderly manner that preserves values and avoids disrupting credit relations. To be effective, clear procedures will need to be put in place to ensure that bad assets would be identified and that new loans are only provided where justified on prudent commercial criteria. It will also be important to move quickly to identify buyers so that the bridge banks can be returned to the private sector in a timely fashion.

The Government’s commitment to strengthening bank supervision and increasing transparency and disclosure are also important. The decision that the new Financial Supervision Agency will immediately carry out intensive inspections of the major 19 banks in conjunction with the Bank of Japan and the intention to reinforce the inspection, surveillance and supervision functions of the new Agency are especially welcome.


IMF EXTERNAL RELATIONS DEPARTMENT

Public Affairs    Media Relations
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