Japan gives approval to injection of money into leading banks

PUBLISHED : Saturday, 13 February, 1999, 12:00am
UPDATED : Saturday, 13 February, 1999, 12:00am

Japan yesterday gave an informal approval to an injection of public money into leading banks to prop up their capital and encourage problem loan disposals, officials said.

The Financial Reconstruction Commission told banks to prepare for issuance of preference shares and similar equities which would be bought up by the commission.

'We told the banks that they can go ahead with holding shareholders' meeting to get internal approval for raising the limit of preference shares they can issue and increase capital,' a commission official said.

The banks will have shareholders' meetings from next week to change their in-house rules and secure approval for increased preference share issues, to be bought up by Tokyo.

Reports said Tokyo would inject a total of 7.4 trillion yen (about HK$501.89 billion) into 15 major banks. The banks are expected to apply for public money in March.