Former financial diplomat Eisuke Sakakibara said Thursday the government of Prime Minister Junichiro Koizumi has "failed miserably" to resolve the bad-loan problem, making it impossible to push ahead with any real reforms.
Sakakibara, vice finance minister for international affairs between 1997 and 1999, said Koizumi virtually postponed doing anything about the problem the minute he shifted to a soft-landing scenario of avoiding legal settlements and corporate bankruptcies.
During a luncheon meeting at the Foreign Correspondents' Club of Japan, Sakakibara said Koizumi initially sought a hard-landing solution, ordering the Financial Services Agency to conduct special inspections of banks.