Japan Refuses IMF Bank Audit
International pressure is heating up on Japan to accept an investigation of the bad loans plaguing its banks, as worries grow about the impact of the nation’s economic health on the global economy.
International Monetary Fund officials said today that Tokyo has agreed in principle to an IMF investigation of Japanese banks but has repeatedly refused to do it.
Hakuo Yanagisawa, Japan’s financial services minister, is scheduled to meet with IMF Managing Director Horst Koehler during his visit to the United States next week.
At the center of the controversy is the size of the bad loans, which private analysts say is much larger than the $362 billion assessed by the Japanese government.
Yanagisawa reiterated today that Japan cannot accept an IMF audit now.
“Realistically, that would require perfect preparation. Under the current staffing situation, it would be difficult,†he told reporters. “I’ve asked them to wait a bit more.â€
The IMF investigation--called the Financial Sector Assessment Program--applies to all 183 IMF members. Thirteen nations, including Canada, Britain and India, have completed the investigations.
The Japanese government has promised to clean up the debts at the banks, blamed for a stagnant economy that has not revived for a decade.
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