Press Conference by the Minister for Financial Services

(Excerpt)

8 January, 2002

Q.

Please elaborate on the challenges the Financial Services Agency (FSA) is facing for the New Year, and the top-priority issues that need to be addressed in the immediate future.

A.

We saw the New Year while holding various problems at hand of the financial administration. In particular, we fully acknowledge and understand the fact that the issue of disposal of non-performing loans (NPLs), which can be regarded as an issue of strength of financial institutions, have become a subject of debate among general public debate.

We believe it is rationale to have much debate on how the strength of financial institutions would be affected, as a reflection of the acceleration in disposal of NPLs, especially in face of the upcoming closing of accounts in the end of March.

While we believes that the disposal of NPLs will be thoroughly carried out, and that financial institutions are strong enough to withstand it, we are also aware that the market might have its own views, in its own right. We believe that at this juncture, the financial administration must deal with the situation with considerable vigilance.

In relation to this, I gave the following three instructions to the staffs in my New Year's address. Firstly, we must hold accurate information to the greatest extent possible. Secondly, we must refine the information in an appropriate manner and take the best option for the Japanese financial system in medium- and long-term perspectives based on analyses from various angles. Thirdly, we must tackle this tough situation without compromising the integrity, with intense fighting spirit.

In addition to these instructions to the staff, I would personally like to mention that calmness and courage would also be required in tackling various situations.