ID :
55712
Thu, 04/16/2009 - 06:56
Auther :
Shortlink :
https://oananews.org//node/55712
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Japan mulls buying stocks directly from market for 3 years+
TOKYO, April 15 Kyodo - The Japanese government and the ruling coalition plan to allow a new public entity to spend up to 50 trillion yen of taxpayers' money on buying stocks directly from the market over a three-year period, ruling lawmakers said Wednesday.
To this end, the coalition of the Liberal Democratic Party and the New Komeito
party intend to submit a bill on securing capital market functions to the Diet
during the ongoing regular session on April 27 as a lawmaker-initiated bill,
the parliamentarians said.
The Bank of Japan will fund the stock-purchase scheme, aimed at preventing a
collapse of the stock market amid the global economic slump, with government
guarantees of 50 trillion yen.
According to the ruling parties, rather than buying stocks of particular
companies, the public entity to be established would buy a basket of listed
stocks in the event that the prime minister declares a ''crisis.''
Under the scheme, the Financial Services Agency will operate the new entity.
Any profits generated by the body's purchase of stocks would go into state
coffers but taxpayers would bear the risk of stock losses.
The government and the ruling coalition plan to set tough conditions for the
body's stock purchases so the possibility of the new entity actually buying
stocks from the market would be low, the lawmakers said.
It has not yet been decided whether to include specific conditions for the
prime minister's declaration of a crisis in the bill.
The government has implemented a series of emergency measures to bolster stock
prices, including tightening of regulations on short selling of stocks, as the
plunge in stock markets triggered by the global financial crisis has threatened
corporate profits.
Among other such measures, the state-backed Banks' Shareholdings Purchase Corp.
restarted the purchase of stocks held by financial institutions in March, after
terminating the activity in 2006.
Since the corporation buys only stocks held by banks and other financial
institutions, the ruling parties have been calling for the introduction of a
scheme for another entity to purchase shares directly from the market using
public funds in the event of a sharp stock market plunge.
==Kyodo
To this end, the coalition of the Liberal Democratic Party and the New Komeito
party intend to submit a bill on securing capital market functions to the Diet
during the ongoing regular session on April 27 as a lawmaker-initiated bill,
the parliamentarians said.
The Bank of Japan will fund the stock-purchase scheme, aimed at preventing a
collapse of the stock market amid the global economic slump, with government
guarantees of 50 trillion yen.
According to the ruling parties, rather than buying stocks of particular
companies, the public entity to be established would buy a basket of listed
stocks in the event that the prime minister declares a ''crisis.''
Under the scheme, the Financial Services Agency will operate the new entity.
Any profits generated by the body's purchase of stocks would go into state
coffers but taxpayers would bear the risk of stock losses.
The government and the ruling coalition plan to set tough conditions for the
body's stock purchases so the possibility of the new entity actually buying
stocks from the market would be low, the lawmakers said.
It has not yet been decided whether to include specific conditions for the
prime minister's declaration of a crisis in the bill.
The government has implemented a series of emergency measures to bolster stock
prices, including tightening of regulations on short selling of stocks, as the
plunge in stock markets triggered by the global financial crisis has threatened
corporate profits.
Among other such measures, the state-backed Banks' Shareholdings Purchase Corp.
restarted the purchase of stocks held by financial institutions in March, after
terminating the activity in 2006.
Since the corporation buys only stocks held by banks and other financial
institutions, the ruling parties have been calling for the introduction of a
scheme for another entity to purchase shares directly from the market using
public funds in the event of a sharp stock market plunge.
==Kyodo
