Japan’s parliament endorsed changes in legislation dealing with failed financial institutions as part of efforts by regulators worldwide to avoid a repeat of the global financial crisis.
The passed amendments, proposed by the Financial Services Agency, allow brokerages and insurers to join banks in being eligible for emergency capital from the state-run deposit insurance agency.
The Upper House today also approved so-called bail-in rules that impose losses on investors of failing financial institutions to reduce taxpayers’ burden. The vote was broadcast live through the Internet.
The market meltdown following Lehman Brothers Holdings Inc.’s 2008 collapse prompted authorities around the world to bolster preparedness for financial turmoil. The Basel Committee on Banking Supervision, which sets international banking rules, has proposed that creditors contribute to shoring up firms’ finances before public money is used in the event of a crisis.
Mitsubishi UFJ Financial Group Inc., Sumitomo Mitsui Financial Group Inc. and Mizuho Financial Group Inc. — Japan’s three so-called megabanks — will seek approval from their shareholders later this month to change corporate rules in accordance with the law amendment, the Tokyo-based lenders said in statements last month.
The revisions would allow the banks to issue preferred shares that can convert into common stock or be written off if firms become non-viable.
Mitsubishi UFJ shares fell 1 percent to 609 yen as of 2:22 p.m. in Tokyo. Sumitomo Mitsui dropped 0.7 percent and Mizuho declined 1 percent. The benchmark Topix Index rose 0.1 percent.


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