|Eintime Conversion for education and research 05-14-2006 @
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Bank Loans Bad130k Job Loss*
Says Banks' Bad-Loan Disposal
May Result in 130,000-190,000 Lost Jobs
By AUDREY MCAVOY and HIDENOBU KAGEYAMA
Dow Jones Newswires
TOKYO -- If Japan completes disposal of banks' existing nonperforming loans within two years, 130,000 to 190,000 people could become unemployed, the Japanese Cabinet Office said in its bad-loan disposal impact report. [need 24 in 4--RSB]
"According to estimates, if existing bad loans at major banks are disposed of within 2 years, 390,000 to 600,000 may be forced to change their jobs and 130,000 to 190,000 people may become unemployed," the Cabinet Office report said.
The report was based on the premise that the nation's largest banks will dispose of 12.7 trillion yen ($101.8 billion) in problem loans within two years, Kiyohiko Nishimura, professor of economics at Tokyo University and the chair of the committed that authored the report, said.
The estimates were based on historical records of how many workers changed jobs or became unemployed when their employers were liquidated or restructured under Japan's rehabilitation law, Nishimura said.
The report also takes into account the impact on workers from a "chain reaction" in bankruptcies that will likely occur as bad loans are disposed of.
Mr. Nishimura said that the estimate for 130,000 to 190,000 redundancies doesn't include people who will leave the job market. Some will leave the job market altogether as they give up looking for work or retire early, or otherwise decide to stop working, he noted.
The committee's estimates for such cases vary according to industry, but a large percentage of workers in the construction, manufacturing and retail industries are expected to fall into this category, the report indicated.
Mr. Nishimura said it will be important to attend to the needs of people who involuntary leave the job market by carrying out reforms to stimulate the labor market as mentioned in the government's blueprint for economic reform.
Write to Audrey McAvoy at email@example.com and Hidenobu Kageyama at firstname.lastname@example.org
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