Japan may inject funds into regional banks -paper

The government is looking at a plan to inject public funds into 40 or more regional banks, whose capital bases are being hurt by rising bad loans amid the financial crisis, the Mainichi newspaper reported on Wednesday.

The government is looking at a plan to inject public funds into 40 or more regional banks, whose capital bases are being hurt by rising bad loans amid the financial crisis, the Mainichi newspaper reported on Wednesday.

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Seeking to address worries about the financial system and ease a credit crunch, the government aims to boost the capital adequacy ratio of the banks to around 8 per cent from as low as 4 per cent, the paper said.

The government plans to inject the funds at the end of the business year which ends in March, it said.

The Financial Services Agency estimates that the plan is feasible within an existing public fund framework of about 2 trillion yen ($21.4 billion) which would easily allow an injection of 10 billion yen into each bank, the Mainichi said.