Tokyo, Sept. 16 (Jiji Press)–A Japanese government panel began discussions Wednesday to revise the money lending business law to make it easier for foreign financial institutions to meet financing needs that cannot be met solely by Japanese banks. The Financial System Council, which advises the prime minister, held the first meeting of a working group to consider what would be the first revision of the law in roughly 20 years. The Financial Services Agency presented at the meeting a list of issues that should be discussed to ease requirements for foreign banks to participate in syndicated loans organized in Japan. The proposed revision is aimed at increasing entities providing growth financing, including for large-scale mergers and acquisitions. Regulations currently applying in a largely uniform way to loans for both corporate and retail clients will be made more flexible based on the characteristics of borrowers and other circumstances. The working group plans to consider the proposed change with an eye to submitting a bill to revise the law to next year’s ordinary session of the Diet, Japan’s parliament. Under the current law, foreign financial institutions that do not hold a banking license in Japan must establish a business base in the country to participate in syndicated loans. Discussions will focus on easing requirements for foreign banks when, for example, borrowers are large companies with strong negotiating power. Many members of the working group broadly expressed support for the idea of easing the requirements. Some said that, while they back an easing of rules for loans to large companies and professional borrowers, current regulations should be maintained for loans to small and midsize enterprises and microbusinesses. END [Copyright The Jiji Press, Ltd.]
