It has also limited the process of securitization, in which banks package and resell claims on their loans outstanding — a process that was supposed to help banks reduce their risk by spreading it, but has turned out in practice to be a way for banks to make ever-bigger wagers with other people's money.
But regulators said they were wary of taking additional time to assess individual loan files, a process that would have delayed aid to everyone.
The government has already committed itself to forcing banks to write off almost 13 trillion yen in bad loans, now $109 billion, a process that could put as many as 1.1 million people out of work, according to research by the Nippon Life Insurance Company, the Dai-Ichi Mutual Life Insurance Company and Deutsche Securities, a unit of Deutsche Bank.
Then, too, Japanese banks have written off $473 billion in bad loans over the last eight years, a process that has more than eliminated what meager operating profits they may have had.
The bill calls on the Education Secretary to devise a process that would refinance FFEL loans owned by private lenders and investors.
Like their American counterparts, European banks have often extended loan terms in the hope that values will improve, a process that is known as "extend and pretend".
The filing is merely the first step in a process that could ultimately end in a repayment plan or modified loan rather than the loss of the home.
Although the Financial Services Agency, the bank regulator, recently emphasised that DIP loans will be treated as healthier loans, banks still have to disclose them as loans to bankrupt companies, a process that inflates banks' bad-loan numbers.Still, the biggest reason why DIP lending has yet to take off is that most companies have few attractive assets left to use as collateral for fresh loans.
As part of the pact, the bank agreed to comb through each loan file to spot potential errors, a process that the regulators will use to help determine the size of the payouts to homeowners.
Dr. Chu said he had come into office in January 2009 trying to speed up a loan guarantee process that had been established by a 2005 law, but which had not at that point resulted in any actual loans.
