The Industrial Revitalization Corp. of Japan (IRCJ), a body created in 2003 to turn around failing corporations, completed part of its mission at the end of March after buying the loans owed by selected businesses. The remaining part of the mission of the semigovernmental agency, due to disband three years from now, is to find business partners for those businesses and put them on the recovery track.
If some of those loans decline in value by the time the agency is dissolved, the losses are to be covered by the agency, which is partly funded by the government. In other words, the bill will be passed on to taxpayers. The IRCJ, which started out with a buyback fund of 10 trillion yen, has so far spent about 1 trillion yen purchasing loans and supplying capital.
The IRCJ is right to try to avoid losses by selling the loans at higher prices than at what it bought them from creditor banks. Given tight market conditions, though, the agency's ability to turn profits will be tested. At the very least, it should try to minimize taxpayers' burden.