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JCP criticizes bill to revise law on share purchases held by banks at public fund

At the House of Representatives Financial Affairs Committee meeting on January 9, the Japanese Communist Party criticized a bill introduced by the ruling Liberal Democratic and Komei parties to amend the stock purchase law to allow "banks to buy up shares held by banks for the banks, by using public funds."

The bill, proposed by the Liberal Democratic and Komei parties, entails "revision of the law on the restriction of holding of shares by banking institutions."

The current law was enacted in 2001, supported by then three ruling parties including the LDP and Komei. It allows the share-buying organization (headed by Mizuho Bank President Sugiyama Seiji) to use public funds to buy-support corporate shares held by banks. The loss incurred by share price declines would be paid off by using tax revenues.

The proposed revision will extend the term permitted for buy-up, which will expire at the end of September 2006, to March 2012.

At the committee meeting, JCP Dietmember representative Sasaki Kensho pointed out that five of the six board members of the buy-up organization are presidents or heads of major banks, and asked if the organization's managing committee including these bank executives is making decisions on buying and selling of shares on behalf of major banks.

Naito Jun'ichi, the general affairs and planning bureau director of the Financial Services Agency, virtually admitted to Sasaki's statement, saying that the buy-up decision is made by the organization's managing board.

Sasaki said, "By using public funds, major banks are supporting the share prices to help themselves. It is unjust for the people to be made the final payer by an organization disguised as a public trust."

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