Financial Services Minister Hakuo Yanagisawa and business leader Takashi Imai agreed Wednesday to cooperate in efforts to accelerate the disposal of bad loans through the consolidation of borrowing companies, business officials said.
Imai, chairman of the Federation of Economic Organizations (Keidanren), agreed to a request by Yanagisawa that the influential business group help the Financial Services Agency map out measures to deal with the bad loan problem, they said.
"Some types of industries have too many players, which need to be reduced," Imai was quoted as telling Yanagisawa.
Yanagisawa told Imai that the government is considering giving tax breaks involving debt waivers by banks to encourage corporate restructuring.
"Reduction of bad loans may be carried out mostly through banks' debt waivers, but the weakening of the footing of major creditor banks is inhibiting the process. We need a public framework that promotes waivers," Yanagisawa was quoted as saying.
One of the public support measures is a law that encourages companies to spin off divisions and excessive facilities, which has been in place since October 1999, he said.
He voiced reluctance to set numerical targets for the disposal of bad loans, however, saying, "It is difficult to decide (targets) uniformly."