ID :
26602
Sat, 10/25/2008 - 20:52
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https://oananews.org//node/26602
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Japan mulls resuming buying shares held by banks
TOKYO, Oct. 25 Kyodo - The government is considering resuming its purchases of shares held by banks as
part of its measures to deal with recent stock price falls, sources familiar
with the situation said Saturday.
By taking such steps, the government aims to demonstrate its determination to
stabilize financial markets and stop the stock price declines, the sources
said.
The government envisions the resumption of share buying by Banks' Shareholdings
Purchase Corp., an institution it set up in 2002 to buy shares held by banks to
help them reduce cross-shareholdings with industrial companies, they said.
It also plans to ask the Bank of Japan to purchase shares held by banks, they
said.
The government will also consider boosting the amount of public funds set aside
to be injected into struggling banks from the current 2 trillion yen.
Through the series of measures, the government hopes to stabilize financial
markets but the recent stock price plunge has largely resulted from sell-offs
of shares held by foreign financial institutions and hedge funds with fund
shortages to lock in profits.
As a result, even some government officials think the effects of the planned
purchases of shares held by banks may be limited, the sources said.
The bank shareholdings purchase institution had bought some 1.6 trillion yen
worth of shares by 2006. It cannot buy such shares at present, but the
government plans to revise a law to have the organization resume share
purchases, the sources said.
The Bank of Japan bought 2 trillion yen worth of shares from banks from 2002 to
2004.
The government, meanwhile, submitted a bill to the Diet on Friday to allow it
to inject state funds into banks and other financial institutions to shore up
their capital bases and ease the credit crunch amid the global financial
crisis.
The government has allocated around 2 trillion yen for bank recapitalization in
the budget for the current fiscal year through March 2009.
The government will consider raising the amount by setting aside funds in an
additional supplementary budget for fiscal 2008 and the fiscal 2009 budget, the
sources said.
==Kyodo
part of its measures to deal with recent stock price falls, sources familiar
with the situation said Saturday.
By taking such steps, the government aims to demonstrate its determination to
stabilize financial markets and stop the stock price declines, the sources
said.
The government envisions the resumption of share buying by Banks' Shareholdings
Purchase Corp., an institution it set up in 2002 to buy shares held by banks to
help them reduce cross-shareholdings with industrial companies, they said.
It also plans to ask the Bank of Japan to purchase shares held by banks, they
said.
The government will also consider boosting the amount of public funds set aside
to be injected into struggling banks from the current 2 trillion yen.
Through the series of measures, the government hopes to stabilize financial
markets but the recent stock price plunge has largely resulted from sell-offs
of shares held by foreign financial institutions and hedge funds with fund
shortages to lock in profits.
As a result, even some government officials think the effects of the planned
purchases of shares held by banks may be limited, the sources said.
The bank shareholdings purchase institution had bought some 1.6 trillion yen
worth of shares by 2006. It cannot buy such shares at present, but the
government plans to revise a law to have the organization resume share
purchases, the sources said.
The Bank of Japan bought 2 trillion yen worth of shares from banks from 2002 to
2004.
The government, meanwhile, submitted a bill to the Diet on Friday to allow it
to inject state funds into banks and other financial institutions to shore up
their capital bases and ease the credit crunch amid the global financial
crisis.
The government has allocated around 2 trillion yen for bank recapitalization in
the budget for the current fiscal year through March 2009.
The government will consider raising the amount by setting aside funds in an
additional supplementary budget for fiscal 2008 and the fiscal 2009 budget, the
sources said.
==Kyodo
