Bank recapitalization bill likely to pass lower house panel Wed

TOKYO, Nov. 4 Kyodo - A lower house committee is expected to pass a bank recapitalization bill, designed to inject state funds into financial institutions, by a majority vote Wednesday with the backing of the ruling parties, lawmakers said Tuesday.

The ruling bloc led by Prime Minister Taro Aso's Liberal Democratic Party will
modify the bill based on some of the requests from the main opposition
Democratic Party of Japan before voting on it, but the DPJ is expected to
oppose the modified version on the grounds that not all of its proposals have
been accepted, they said.
After approval by the House of Representatives Committee on Financial Affairs,
the revision bill to the Act on Special Measures for Strengthening Financial
Functions will likely pass the full lower house Thursday before being sent to
the House of Councillors, which is dominated by the DPJ-led opposition bloc.
The emergency legislation amid the global financial turmoil would allow the
government to accept applications for public funds from financial institutions
until the end of March 2012, instead of March this year as stipulated in the
present act.
The ruling coalition and the DPJ have agreed that the bill would be revised so
as to urge bank managers to take responsibility if they apply for public money
for reasons unrelated to the financial crisis, and to facilitate lending to
smaller businesses, to which banks are now regarded as reluctant to extend
fresh loan due to fears of defaults.
They have also agreed that the government should disclose the names of
financial institutions receiving taxpayers' money by way of Norinchukin Bank,
the de facto central bank for Japan's agriculture, forestry and fishery
cooperatives.
The two sides have failed, however, to agree on some other points, including
the DPJ's request that the government obtain Diet approval before injecting
money into Norinchukin. The DPJ has also demanded that Shinginko Tokyo, a bank
currently making restructuring efforts after reckless management, be excluded
from possible applicants for public money injections.
But the LDP rejected these proposals, citing legal difficulties in treating
certain financial institutions differently in the bill.
==Kyodo