Financial Services Minister Heizo Takenaka welcomed on Tuesday plans by Tokyo Gov. Shintaro Ishihara to establish a new type of bank to help spur the local economy.
Takenaka said he does not yet know the details of the proposal but that he believes the establishment of new banks would be "very meaningful for the sake of development of the banking industry."
"Generally speaking, we welcome new entries," he said. "We would like the various parties to study the matter aggressively."
Ishihara, re-elected Sunday to a second term, has said he hopes to draw up a draft plan in May.
He said he has called on several companies to participate in the project.
The envisaged bank would be backed by public confidence in the Tokyo Metropolitan Government and the special skills of certain companies, such as the information technology system used by East Japan Railway Co., according to Ishihara.
He said he wants to change the way banks lend money, as existing banks do not extend loans without securing sufficient collateral.