Business

Japan to inject $66 billion into ailing banks
Copyright © 1999 Associated Press

TOKYO (February 10) - The Japanese government will inject public funds worth almost $66 billion into 15 major banks in an effort to shore up the country's debt-ridden financial system, newspapers reported Thursday.
The government passed legislation last October allowing the use of taxpayers' money to bail out weak Japanese banks or help replenish capital reserves at healthier ones.
The Financial Restructuring Committee will formally notify the 15 banks on Friday that their requests for public funds have been approved, major dailies including the Yomiuri Shimbun and the Asahi Shimbun reported.
The banks will receive the funds by the end of March, the reports said.
Japan is mired in its worst recession since World War II, as debt-ridden banks scale back on lending, starving companies of cash.
Many finance institutions are now struggling to write off massive bad loans left over from the collapse of Japan's "bubble" economy in the late 1980s.
The committee has asked the banks to carry out drastic restructuring, and some banks have reportedly been urged to restrict their activities to the domestic market.
Among the 15 banks, Fuji Bank Ltd. will get the largest amount of $8.85 billion, followed by Dai-Ichi Kangyo Bank Ltd. with an injection of $7.96 billion, the newspapers said.
The 15 banks also plan to strengthen their capital by issuing new stock totaling $15.04 billion, the reports said.