- The Washington Times - Thursday, January 16, 2003

TOKYO, Jan. 16 (UPI) — The man who will be heading the Japanese agency that will take a leading role in eliminating bad loans clogging up the country's economy suggested Thursday that the agency's establishment could be postponed.

The Industrial Revitalization Corp. is to begin operating April 1, as Prime Minister Junichiro Koizumi steps up efforts to bolster Japan's growth prospects.

When the decision was announced in December to appoint Sadakazu Tanigaki, a seasoned financial bureaucrat, as the IRC's leader, there were criticisms that he would not be aggressive enough to succeed where no administration has been able to. That is, to steadily decrease the amount of non-performing loans that have stifled Japan's banking system.

Specifically, the IRC is intended to help ailing companies get back on their feet by purchasing loans they might have from financial institutions apart from their main creditor.

But at a press briefing, Tanigaki told reporters that there could be some political opposition to the creation of the IRC, and it might not gain lawmakers' approval until the following Diet session in November.

The IRC will not be established "until the tail end of March, at the very earliest," Tanigaki said.

It is reported that starting up the IRC could cost as much as $83 million, and the amount needed to keep it running effectively is expected to balloon at a time when Japan's government spending continues going up.

Some politicians have called for the IRC to be in operation for a limited time, such as five years, so that it will be forced to concentrate its efforts to shore up bad loans in a relatively short space of time.


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