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TOKYO, Oct 23 (AFP): Japan needs to reduce the number of government-run banks from the current eight, its finance minister said today, amid a report that Tokyo is considering merging six of them into one unit to improve efficiency.
"Apparently we have to reduce the total volume," Finance Minister Sadakazu Tanigaki said in a debate programme aired on the private Fuji network.
Prime Minister Junichiro Koizumi has pledged to streamline bloated government units and has already fulfilled his long-held dream of breaking up the massive state-run post office.
"Now that we have reformed postal services, which represent inflows (of funds into state coffers), we must reform financial institutions that control outflows," Tanigaki said.
His comments came after the mass-circulation Yomiuri Shimbun reported Sunday that the government is considering a plan to merge at least six of the eight government-affiliated financial institutions into a single entity.
Tanigaki said that pending discussions he could not provide specific details on the likely shape of the banking structure after any reforms.
The Yomiuri said the government aimed to include the plan in basic reform policies to be drafted in November at a key economic council chaired by Koizumi.
Koizumi once said the eight government-run banks, which control funds of trillions of yen (billions of dollars), should be integrated "into one, if possible", it said.
The Yomiuri said that six banks could be merged into one unit while the remaining two would be privatised or converted into an institution by local governments.
The six candidate banks for the integration into a new entity include the Japan Bank for International Cooperation (JBIC), the paper said, without naming its sources.
JBIC's lending operations would be taken over by the new institution by limiting its loans for certain projects, some of which would be taken over by the prime minister's office, it said.
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