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US finance chiefs pressure Japan over loan reforms – report

According to a newspaper report, finance industry leaders in the US are putting pressure on the Japanese financial services regulator, the FSA, to moderate planned interest rate reforms.

The Financial Times reports that the Financial Services Roundtable, the Financial Services Forum and the Managed Funds Association have all written to the FSA, as well as Japan’s ambassador to Washington, to express concern over plans to cap the rate of interest charged on consumer loans in Japan.

The FSA wants to clamp down on an overheating personal lending market by limiting the interest rate that can be charged on personal loans to around 20% from the present 29%, while also capping the amount of money an individual can borrow.

The Financial Times adds that the US groups are concerned about borrowers being driven to underground loan sharks as a result of the changes.