Press Conference by the Minister for Financial Services

(Excerpt)

9 November, 2001

Q.

The price of banks' stocks is generally low and fluctuating erratically, as exemplified by Asahi Bank's stock which was sold heavily yesterday, falling to 76 yen at one point. Please elaborate on the causes of this phenomenon and your view on the market.

A.

I imagine market participants, respectively, are estimating the prospects of the interim financial statement. In addition, they may be taking into account the impact that may arise if banks have to undergo special inspections.

The prospect of the interim financial statement would inevitably look dim considering that the disposal of non-performing loans (NPLs) is progressing in an orderly manner, in addition to the introduction of mark-to-market accounting against the background that the Nikkei average has lost about one quarter of its value since the end of March.

However, in our opinion, bank's financial soundness will not be hindered as a result.

In right of such analysis, I wonder what the market is focusing on; the market's view may be exaggerated and too pessimistic towards bank's stock. It would be desirable if the market takes a closer and more careful look at the banks' fundamental financial strength and invest according to its evaluation.

We will conduct special inspections in a thorough manner. In my opinion, it is important to understand that the target of special inspection will be selected based on a objective criteria, and that the inspection will be carried out according to the FSA's inspection manual.

At this stage when even an interim result have not been issued, it is too early to ponder upon the result of the inspection or making a investment decision based on the result.

There is neither smoke nor shadow in sight at the moment.

Let me emphasize that we are examining any unlawful investment activities that exploit peoples' anxieties in uncertain times like this through the Securities and Exchange Surveillance Commission and I urge market participants not to step over any rules and regulations.