The government on Friday appointed former Prosecutor General Akio Harada as head of an advisory panel tasked with discussing which entity should handle foreign-aid loans, a pending issue in the process of consolidating state-run financial institutions.

Set up under Chief Cabinet Secretary Shinzo Abe, the six-member panel plans to hold its inaugural meeting by the end of this year, Abe told a news conference.

The Council on Economic and Fiscal Policy proposed Tuesday withdrawing yen-loan operations from the Japan Bank for International Cooperation as part of a plan to merge JBIC and four other state financiers into a single entity.

But the council left the contentious issue of whether the government would take direct control of foreign-aid loan operations or transfer them to another aid entity -- such as the Japan International Cooperation Agency -- to the experts, who are scheduled to make a decision by the end of March.

The panel will discuss matters that include the strategic use of Japan's official development assistance and coordination within the government, Abe said.