OSAKA -- Top business leaders from the Kansai region on Friday asked Toshihiko Fukui, vice governor of the Bank of Japan, to secure stability in the nation's financial system because prolonged uncertainties are beginning to adversely affect small and medium-size firms.

Yasuo Shingu, chairman of the Kansai Economic Federation, said the economic downturn is being felt more severely in the region than elsewhere because of the large concentration of small firms heavily dependent on exports to other Asian nations, which have also been hit by the recent currency and stock market crises.

Masafumi Onishi, chairman of the Osaka Chamber of Commerce and Industry, said private Japanese financial institutions, especially city banks, are becoming increasingly reluctant to offer new loans to small firms, regardless of their fiscal conditions. Onishi called on financial authorities to help facilitate and expand government-affiliated financial institutions' loans to such firms, and to make concrete decisions on how to utilize public funds to protect depositors.

Fukui replied that the Bank of Japan would watch carefully so firms that meet the necessary requirements will be able to receive the funds they need.