Japan's Watanabe urges U.S. to inject funds: report March 23, 2008 8:24 PM ET
TOKYO (Reuters) - The United States should inject public funds into its financial system to solve the mortgage crisis that has sparked global credit fears, Japan's financial services minister was quoted as saying by the Financial Times.
Urging the United States to learn from Tokyo's experience during its bad loan crisis, during which massive amounts of public funds were injected into the banking system, Yoshimi Watanabe also said Japan was willing to help solve the problem if needed.
"It is essential (for the U.S.) to understand that given Japan's lesson, public fund injection (into the financial sector) is unavoidable," Watanabe was quoted as telling the newspaper.
Although "it is very difficult for Japan to convey such a message to a foreign government ... Japan could, for example, convey -- through the G7 or central bank governors' meeting -- Japan's lesson and that we are prepared to take coordinated action if necessary" to help resolve the issue, he said.
But Watanabe had no response on whether Japan might cut interest rates in a coordinated response, the paper said.
Watanabe said quick action by world leaders was needed to avoid a "severe" dollar crisis and excess liquidity had started flowing out of the United States, a situation that could lead to unprecedented problems if not stemmed.
"One thing is to fix the hole in the bathtub," he said. "(But) we must recognize that the current crisis is not as straightforward as past dollar crises."
(Reporting by Elaine Lies)
Copyright 2008 Reuters
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