Policy Statement by Shozaburo Jimi, Minister of State for Financial Services, at the Committee on Financial Affairs of the House of Representatives
February 22, 2012
I am Shozaburo Jimi, Minister of State for Financial Services. I appreciate your continued support and encouragement.
Today, I would like to state my thoughts on the current financial administration.
(Reconstruction from the Great East Japan Earthquake)
Nearly one year has passed since the Great East Japan Earthquake struck. This year is important as the first year for the reconstruction from the devastating disaster, so both the public and private sectors jointly have to do their utmost to steadily carry forward full-fledged reconstruction in the affected areas.
The Financial Services Agency (FSA) will continue to make every effort to address reconstruction in the affected areas. For example, in order to ensure that the financial sector firmly support efforts toward reconstruction, the FSA continuously encourages financial institutions and other organizations to make effective use of various reconstruction measures, such as the Act on Special Measures for Strengthening Financial Functions, which was amended to include special treatment for supporting reconstruction in areas affected by the earthquake and tsunami disaster, and the “Guideline on Private Liquidation of Individual Debtors”.
(Current Situation surrounding Japan's Financial System)
Next, I will explain the current situation surrounding Japan's financial system.
The environment surrounding small and medium-size enterprises (SMEs) and financial institutions continues to be severe, against the backdrop of the European sovereign debt crisis, for which a conclusions can not get be seen, as well as the historic appreciation of the yen and other factors.
Under this situation, we will take appropriate measures to ensure the soundness of the financial system, and to enable a smooth and active exercise of the financial intermediary function.
(Facilitation of Financing)
Now, I will talk about the facilitation of financing.
In light of the basic role of the financial sector, that is, to support the real economy, financial institutions are required to adequately meet client companies' funding needs and also provide maximum support for improving their management by actively exercising the consulting function.
In order to ensure that financial institutions fully play these roles, the FSA has taken various measures to facilitate financing, including the enforcement of the Act concerning Temporary Measures to Facilitate Financing for SMEs.
While I believe that efforts to facilitate financing by financial institutions have been basically taking root as a result of those measures, some problems have also been pointed out. Among the problems are an increase in the re-modification of lending terms and the presence of some SMEs that have not drawn up business improvement plans after being granted modification of their lending terms. Therefore, it is necessary to ensure financial discipline and also aggressively promote genuine business improvement support for SMEs as an “exit strategy,” so I have concluded that it is appropriate to extend the period of this Act, by just one year again, for the last time, so as to promote a smooth shift in emphasis to support for business rehabilitation.
(Global Financial Regulatory Reform)
Now, I will mention developments related to global financial regulatory reform.
In light of strengthening the global financial system, international agreements have been reached, including the new regulatory framework of bank capital, and a comprehensive policy package concerning systemically important financial institutions, at the Cannes Summit that was held in November 2011. In addition, various other measures, such as the reform of the over-the-counter derivatives market, are being developed.
Japan will continue to actively contribute to international discussion and cooperate with other countries in proceeding with the reforms in the international arena.
(Key Points of New Bills)
Finally, I would like to explain the key points of the new bills that we will submit to the Diet.
We will ask you to deliberate four bills in this Diet session.
Let me explain the key points of the bills that we have already submitted to the Diet.
The first of those bills is the bill to partially amend the Act concerning Temporary Measures to Facilitate Financing for SMEs, which extends the period of this Act for one year again, as I explained earlier.
The second is the bill to partially amend the Act on Limitation on Shareholding by Banks and Other Financial Institutions. It extends for five years the period of purchase of shares from banks by Banks' Shareholding Purchase Corporation, which is scheduled to expire at the end of March 2012.
The third is the bill to partially amend the Insurance Business Act. This bill also extends for five years the period of government subsidies for Life Insurance Policyholders Protection Corporation, which is scheduled to expire at the end of March 2012, and relaxes regulations concerning the scope of business operations of insurance companies' subsidiaries and the transfer of insurance policies.
In addition to these bills, we plan to submit the bill to partially amend the Financial Instruments and Exchange Act. This bill includes provisions for: putting in place necessary measures concerning regulations of over-the-counter derivatives transactions and insider trading related to corporate reorganization; revision of the monetary fine system; and putting in place necessary measures for the establishment of an integrated exchange if we reach a meeting of the minds among related parties.
It is essential that these bills be enacted as early as possible so that the necessary measures can be taken promptly. I would like to ask you to deliberate and approve them.
In these remarks, I have stated some of my ideas as the Minister of State for Financial Services. I am resolved to continue to do my best in policy management with your kind support. I would appreciate the understanding and cooperation of Chairman Kaieda and all the other members of this Committee.
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