JCP proposes measures to protect local credit banks from overly stringent checkups

Japanese Communist Party Policy Commission Chair Fudesaka Hideyo at a press conference on January 8 published an emergency JCP proposal to protect local economies and small- and medium-sized businesses from the failures of credit unions.

In 2001, 46 credit unions and credit associations, which played an important role in local economies, went bankrupt as a result of inspections using overly stringent guidelines imposed by the Financial Services Agency.

Many failures took place in November and December as the Agency wanted these credit unions to clear bad loans by April 2002 in accordance with the government policy of writing off bad loans.

Fudesaka said many of those credit union failures arose mainly from the inspection guidelines which the Financial Services Agency applies to local credit unions and major city banks alike. He said that the two categories should not be mixed up and the Agency should end imposing the same guidelines on local credit unions.

Fudesaka said that the government policy of making local financial institutions go bankrupt will deprive small businesses of funds, which will result in more business failures.

The JCP proposal includes a call for separate guidelines to be set up appropriate for local credit unions responsible for local economies.

In the proposal the JCP demands that the government protect the small businesses, the borrowers from the failed credit unions, and calls on major banks and governmental finance institutions to improve conditions for loans for small businesses as part of their public responsibility. (end)