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Japan has announced new and potentially significant steps toward addressing its banking problems. We welcome this further recognition by Japan of the importance of strengthening its financial system.
What is important is for the Japanese authorities to move quickly to translate this approach into concrete actions that will dispose of the burden of bad assets on the system and achieve the necessary restructuring and consolidation of the banking system with appropriately conditioned provision of public money. Quick and decisive actions are essential to restore confidence.
Resolution of the financial sector problems, combined with sustained and substantial fiscal stimulus, are needed to achieve the strong recovery in domestic demand that is so important to Asia and the international community as a whole.
As always, we will continue to watch developments in exchange markets closely.