On March 1, the second subgroup (subgroup leader: Professor Toshihiro Ihori, University of Tokyo) of the Study Group on the Financial System (established by JBA and headed by Professor Keimei Kaizuka, Chuo University) compiled and published the report, "Desirable Government Policy Finance Reform---A Proposal," based on their fiscal 2004 studies.
The main points of the report are as follows.
| - | In reforming government policy finance it is important to clarify the roles government and the private sector should play, heighten the efficiency of government financial institutions and curtail budgetary expenses. The report proposes reviewing the policy finance markets to be targeted and means of financing along with establishing firm budgetary restraints for realizing these objectives. |
| - | It addresses the market review by making specific recommendations for the three markets that have been the turf of policy finance --- housing loans, small and medium-size company loans and corporate rehabilitation. |
| - | It proposes that financing means be shifted from direct financing to credit guarantees, that guaranteed items be strictly governed, thereby reducing the size. |
| - | As to solidifying budgetary constraints, the report proposes that government financial institutions/businesses that are unsuitable for privatization be transferred to a "government-owned stock company," a new organizational form with limited governmental liability that would serve to check unrestrained expenditures in the form of subsidies. |