The Financial Services Agency this month worked out a detailed plan to set up a quasi-public body to purchase surplus shares unloaded by private banks. A related bill is expected to reach the Diet floor perhaps during an extraordinary session that opens this autumn. The problem is that the plan is designed to help to prop up the stock market by an artificial means.
What is in the works looks very much like the "price-keeping operation" that has been carried out often since the 1990s. The latest "PKO" plan was floated in April during the administration of former Prime Minister Yoshiro Mori. It was later incorporated in an economic stimulus package put together by that administration, though it was not put into action.
The plan is a deliberate attempt to bypass the market rules, as were previous PKO measures. In particular, it runs counter to the spirit of structural reform being advocated by Prime Minister Junichiro Koizumi, who emphasizes the importance of "letting the private sector do what it can." The Koizumi administration owes the public a credible explanation of why it wants to set up a stock-purchasing entity.