ID :
43791
Mon, 02/02/2009 - 22:22
Auther :
Shortlink :
https://oananews.org//node/43791
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Cabinet to approve revision of industrial revitalization law+
TOKYO, Feb. 2 Kyodo -
Japanese Prime Minister Taro Aso's Cabinet is scheduled to approve Tuesday a
plan to revise the industrial revitalization law, paving the way to devote
public funds to assist companies hobbled by thin capital bases in the wake of
the global financial crisis, industry ministry officials said Monday.
Should the law be revised, the government-backed Japan Finance Corp. will be
able to compensate a large portion of losses banks may incur after providing
loans or investing in struggling companies outside the financial sector.
The government will set aside about 1.5 trillion yen for the special program,
which will run through March 31, 2010.
By creating such a guarantee program, the government is hoping to make it
easier for banks to finance companies that have trouble raising capital amid
the deepening economic downturn.
Under the program, the state-owned financial institution would likely
compensate between 50 percent and 80 percent of possible losses on loans or
investments by the Development Bank of Japan or commercial banks, according to
the Ministry of Economy, Trade and Industry.
The government-affiliated development bank or other banks which could join in
the initiative will use their own money to buy shares in companies that have
been approved by the ministry as needing special assistance, based on criteria
of the industrial revitalization law.
The current law does not stipulate protection measures for banks investing in
struggling companies, such as in the form of acquiring preferred shares.
The government will later this week submit a bill to revise the Law on Special
Measures for Industrial Revitalization following the Cabinet approval, the
officials said.
If all goes smoothly, the law is likely to be revised in April, they said.
Companies that would be eligible for the emergency program would only be those
having growth potential, a great impact on the job market and deep ties to
regional economies, according to the officials.
The government allows all industries to be part of the program, but it is
mainly targeting big companies, they said.
==Kyodo
2009-02-02 22:49:30
Japanese Prime Minister Taro Aso's Cabinet is scheduled to approve Tuesday a
plan to revise the industrial revitalization law, paving the way to devote
public funds to assist companies hobbled by thin capital bases in the wake of
the global financial crisis, industry ministry officials said Monday.
Should the law be revised, the government-backed Japan Finance Corp. will be
able to compensate a large portion of losses banks may incur after providing
loans or investing in struggling companies outside the financial sector.
The government will set aside about 1.5 trillion yen for the special program,
which will run through March 31, 2010.
By creating such a guarantee program, the government is hoping to make it
easier for banks to finance companies that have trouble raising capital amid
the deepening economic downturn.
Under the program, the state-owned financial institution would likely
compensate between 50 percent and 80 percent of possible losses on loans or
investments by the Development Bank of Japan or commercial banks, according to
the Ministry of Economy, Trade and Industry.
The government-affiliated development bank or other banks which could join in
the initiative will use their own money to buy shares in companies that have
been approved by the ministry as needing special assistance, based on criteria
of the industrial revitalization law.
The current law does not stipulate protection measures for banks investing in
struggling companies, such as in the form of acquiring preferred shares.
The government will later this week submit a bill to revise the Law on Special
Measures for Industrial Revitalization following the Cabinet approval, the
officials said.
If all goes smoothly, the law is likely to be revised in April, they said.
Companies that would be eligible for the emergency program would only be those
having growth potential, a great impact on the job market and deep ties to
regional economies, according to the officials.
The government allows all industries to be part of the program, but it is
mainly targeting big companies, they said.
==Kyodo
2009-02-02 22:49:30
