Kyodo News - The Daily Yomiuri, July 3, 1998
The following is .the gist of the plan to set up "bridge banks," that was adopted ThursdayJuly2, 1998 by the government and the Liberal Democratic Party.
· The government will draw up a bill to promote the sale of real estate used as collateral.
· The government will draw up an inspection manual for financial institutions within the year.
· In the event of bank collapses, the commissioner of the Financial Supervisory Agency will appoint financial administrators to put the institutions under state control.
· The financial administrators will work to transfer the operations of failed institutions to other lenders as quickly as possible. If problems arise, the collapsed lenders will be turned into bridge banks.
· Using public funds, the Deposit Insurance Corporation will set up a holding company to oversee the bridge banks.
· The corporation will use ¥13 trillion of the government’s financial system stabilization fund to extend loans to the bridge banks through the holding company so as to cover the bridge banks’ losses.
· The bridge banks will be obliged to hand over operations to other institutions within two years, with one-year extensions allowed three times.
· The government will submit relevant legislation to the next Diet session.
