Bank of Japan Gov. Masaru Hayami hinted Thursday that the government's "bridge bank" plan to enable fund flows to continue to sound borrowers at failed financial institutions should also be applied to the nation's 19 major banks.
Transferring the management of a failed large bank to a new one is considered difficult under the planned scheme because the new financial institution would need a tremendous amount of funds.
Regarding the BOJ's tactics for restructuring the financial system, Hayami told a news conference that minimizing the impact of bank failures on the system is the most urgent task for the BOJ. "The collapse of Japan's 19 major banks could have a great influence on the financial system," he said. "Financial authorities must prevent their failure, especially those which deal in derivatives and have overseas relations."
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