Ruling bloc plans public entity to buy shares directly from market+

TOKYO, March 31 Kyodo -
The ruling parties have decided to propose a scheme for a public entity to
purchase shares directly from the market with public funds in the event of a
fast stock market plunge, lawmakers from the parties said Tuesday.
A task force in the Liberal Democratic Party in charge of dealing with the
international financial crisis is planning legislation to authorize the prime
minister to order the public entity to buy exchange-traded funds as well as
equity shares, they said, adding its coalition partner New Komeito party also
agreed on the plan later in the day.
Candidates for the share-purchasing entity include the Banks' Shareholdings
Purchase Corporation, the Development Bank of Japan and the Japan Finance
Corporation, they said.
But the scheme could hurt the credibility of Japanese stock markets as such
direct share purchases from the market may distort fair share pricing in the
market, critics say. So far, no developed country has adopted such a scheme.
The LDP project team's chairman, Hakuo Yanagisawa, said he wants only to put
the share-purchasing scheme in place, indicating caution about actual use of
it.
Financial Services Minister Kaoru Yosano said in a press conference that his
view is that the scheme would be invoked only when a stock market plunge has a
devastating impact on the Japanese economy.
==Kyodo