Japan to Give Financial Aid for Regional Bank Realignments

Politics

Tokyo, Nov. 12 (Jiji Press)--Japan’s government will establish as early as next summer a new financial assistance framework to spur business integration, including outright mergers, among regional banks in the country, it was learned Thursday.

Under the scheme, the government will shoulder part of the initial realignment-linked costs using retained earnings at Deposit Insurance Corp., informed sources said.

The plan will be included in a new economic package to be compiled next month. The government plans to submit a bill to revise the law on strengthening financial functions to next year’s regular session of the Diet, the country’s parliament, the sources said.

Prime Minister Yoshihide Suga is aiming to promote business integration and realignment among regional banks to support local economies hit hard by the novel coronavirus crisis. For that purpose, the government plans to work with the Bank of Japan, which announced earlier this week an initiative to support regional banks seeking business integration.

Core banking and other systems often differ among financial institutions, and a large amount of money will be necessary for unifying the systems. The high costs have been a factor holding small local banks back from integration.

[Copyright The Jiji Press, Ltd.]

Jiji Press