OSAKA -- Finance Minister Masajuro Shiokawa proposed Monday that rules be established to liquidate companies whose debts exceed assets and whose rehabilitation is deemed impossible so that banks' disposal of soured loans can be accelerated.

Finance Minister Masajuro Shiokawa examines a 2002 World Cup commemorative coin during a ceremony.

"It may be an option to clarify rules to facilitate liquidation by banks of (debtor) companies that are suffering from capital deficits and are not likely to be rehabilitated," Shiokawa told a news conference.

He said collusive relations between banks and debtor firms are one of the reasons banks are unable to dump their nonperforming loans.

While noting that the Financial Services Agency is the authoritative body on this issue, Shiokawa said, "I think it is appropriate that banks embark on the liquidation of companies with capital deficits who have not paid dividends for a certain number of years and who have little possibility of rehabilitation after receiving huge amounts of debt write-offs."

Shiokawa said he has talked with Financial Services Minister Hakuo Yanagisawa about establishing such rules and that he may present his ideas on the issue to the Council on Economic and Fiscal Policy, which is headed by Prime Minister Junichiro Koizumi.

Meanwhile, Shiokawa reiterated that the Koizumi Cabinet should keep its pledge of limiting new government bonds to 30 trillion yen a year unless the world is threatened with a global recession.

"The government may have to think flexibly about revenue sources if a global recession is imminent . . . but if it makes changes (to the pledge), it could lead to the collapse of the Koizumi Cabinet," he said.