Aso eyes full protection of deposits+

TOKYO, Oct. 13 Kyodo - Prime Minister Taro Aso instructed Finance Minister Shoichi Nakagawa on Monday to consider protecting deposits fully in case of bank bankruptcy to help ease depositors' concerns amid the global financial crisis, government officials said.

Aso also told Nakagawa, who just returned from a meeting of Group of Seven
financial chiefs in Washington, to consider reviving a law to inject public
funds into capital bases of regional banks, they said.
Before meeting with Aso at the headquarters of the ruling Liberal Democratic
Party, Nakagawa told reporters, ''I believe Japan's (financial) system is sound
but I will assume everything.''
For deposits other than current and other deposits for fund settlements,
principal of no more than 10 million yen and its interest are currently
protected per depositor at each financial institution. The portion in excess of
that amount is paid based on the asset status of the failed financial
institution.
The fund-injection law, meanwhile, became effective on Aug. 1, 2004, as
temporary legislation and the period of application for public funds for
financial institutions under the law expired on March 31 this year.
An action plan announced by G-7 finance ministers and central bank governors at
their meeting Friday called for strengthening the deposit insurance system of
each country. The G-7 groups Britain, Canada, France, Germany, Italy, Japan and
the United States.