Prime Minister Junichiro Koizumi and his economic ministers agreed over the weekend that it will be difficult to forcibly pump public funds into banks by revising relevant laws, government sources said Monday.
Koizumi summoned Finance Minister Masajuro Shiokawa, Financial Services Minister Hakuo Yanagisawa, Chief Cabinet Secretary Yasuo Fukuda and Heizo Takenaka, economic and fiscal policy minister, to his official residence Sunday night, the sources said.
The prime minister wanted to create a Cabinet consensus on economic policy ahead of his meeting Monday with U.S. President George W. Bush, they said.
Some politicians, business leaders and analysts have been calling for forced injections of public money into Japan's undercapitalized banks, which are reluctant to apply for money because such a move might cause their share prices to fall further.
Koizumi and the ministers believe it would be difficult to inject public funds into banks in a uniform manner, but they also agreed on the need to spend public money flexibly, depending on the results of ongoing special inspections of the banking sector, the sources said.
The Financial Services Agency has been inspecting major banks since October as part of efforts to resolve the bad-loan mess.