JCP Shii urges Prime Minister to stop pushing banks to pull out loans from smaller businesses

Japanese Communist Party Chair Shii Kazuo on November 6 demanded that Prime Minister Koizumi Jun'ichiro stop pushing for the early disposal of bad loans because such a policy will only push small- and medium-sized businesses, including those rated as "excellent," into bankruptcy.

At a one-on-one debate with the prime minister, Shii said that bank loans to smaller businesses have decreased by 6.02 trillion yen from 1997 to 2002, and about half the amount was cut in just one year since the Koizumi Cabinet was formed.

This is because banks have rushed to increase interest rates and forcibly collect loans from borrowers in order to raise their capital ratios since the Koizumi Cabinet called for the early cleanup of bad loans, he said.

Shii showed an internal manual of the UFJ Bank instructing its employees to force smaller businesses into accepting an increase of the loan interest rate by using the threat of refusal to lend money. Even those companies whose businesses are going well and paying off their debts smoothly are told the same thing by the bank, Shii added.

In reply to Shii, Prime Minister Koizumi blamed banks, saying that long before the government policy on the write-off of bad loans started, banks had tended to "lend an umbrella when it is fine and take the umbrella away when it rains."

After the debate session ended, Shii commented that Prime Minister Koizumi is shifting the responsibility onto banks, failing to admit that he is the person who is most responsible for the present situation.

He pointed out that behind the government intention to accelerate the cleanups of bad loans is that major U.S. investment banks have a strong desire to control Japan's financial industry, and that the Koizumi Cabinet's policy is only helping them accomplish this goal. (end)