TOKYO (Thomson Financial) - The United States should use public funds to
shore up its financial system and calm recent market turmoil, Japan's financial
services minister said in an interview published Monday.
"It is essential (for the US) to understand that given Japan's lesson,
public fund injection (into the financial sector) is unavoidable," Yoshimi
Watanabe told the Financial Times.
He said Japan was ready to share its experience with the United States at
the Group of Seven meetings of finance ministers, who are due to gather in
Washington next month.
"We are prepared to take coordinated action if necessary," he said. "We must
recognise that the current crisis is not as straightforward as past dollar
crises."
The same newspaper reported over the weekend that US and European central
banks were considering buying mortgage-backed securities to resolve the credit
crisis triggered by a wave of US home loan defaults.
The problems have pushed the dollar down to a 12-year low against the yen
and to its lowest-ever levels against the euro, causing concern in Japan and the
eurozone about the impact on exports.
Japan suffered a deep and prolonged banking crisis in the 1990s after the
country's asset bubble burst, leading to the failure of a number of high-profile
financial institutions.
The Japanese government injected capital to the banking sector in an effort
to shore up markets and struggling financial institutions, some of which were
nationalised to prevent their collapse.
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