Members of a Cabinet Office panel on economic and social policies agreed Thursday that further credit easing by the Bank of Japan would become necessary if companies and banks speed up their restructuring efforts.

During the first meeting of the Economic Policy Forum, organized by the Cabinet Office's Economic and Social Research Institute, many participants said additional measures to ensure a greater flow of funds to the market are needed.

However, the panelists, who include both opponents and supporters of the BOJ, differed on whether monetary policy would trigger further restructuring, or whether its role should be reserved to ease the pain of an overhaul of corporate Japan.

The forum, titled "The Effectiveness and Possibility of Further Monetary Relaxation," was held the day the BOJ lowered both its overnight call rate and official discount rate 0.1 percent.

Kikuo Iwata, a professor of economics at Gakushuin University and a supporter of quantitative easing, argued that current price falls are hindering corporate restructuring.

The central bank should link inflation targeting with either a return to its "zero-interest-rate" policy or aggressive purchases of government bonds to coax markets into believing there will be inflation in the future, he said.

Meanwhile, Kagehide Kaku, deputy chairman of Daiwa Institute of Research and a former BOJ official, countered that the role of monetary policy should only be to lighten the shock of deflation and that, in principle, corporate restructuring is needed to prop up the sluggish economy.

"My one bad mark against the Bank of Japan is that it has not been vocal enough in its call for (corporate) restructuring," Kaku said.

He added that inflation targeting was "an adventurous policy."