The Financial Services Agency will get tough on banks that offer conditional loans to convince borrowers to buy their stocks as a way to boost their capital base, FSA officials said Friday.
The new policy will be spelled out in additions to administrative guidelines for FSA officials.
The announcement comes as the nation's five largest banking groups are scrambling to raise 2 trillion yen in capital by March 31, the end of fiscal 2002. Of this total, roughly half is expected to be raised through third-party stock allocations, in which the bank chooses the companies that buy the stocks.
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