Press Conference by the Minister for Financial Services

(Excerpt)

15 February, 2002

Q.

Can we expect that rigorous execution of special inspections and disclosure of their results will actually accelerate bankruptcy and liquidation of heavy-debtor companies from March to May, when the financial reports are finalized?

A.

Because the inspections are now under the way, I cannot make any prediction. What we have to do is only to steadily carry out the policies that were already decided.

Q.

Both in ruling and opposition parties, some people insist forced or simultaneous injection of public funds, but considering Prime Minister's instructions given yesterday, can we take it that the Koizumi Administration will not take such measures?

A.

Yes, you can. Such types of injection would require new laws.

Q.

Yesterday, Mr. Aso, LDP's Chairman of the Policy Research Council, said injection of public funds was very likely by the end of March. What do you think about it?

A.

As I have just told you, what we are focusing on is to encourage banks to steadily carry out disposal of non-performing loans. At present, I don't expect any situation that would require injection.

Q.

Yesterday, you disclosed the policy for more rigorous special inspections. Does this mean that you and Prime Minister have changed the stance on the injection of public funds?

A.

No, absolutely not. I just emphasized that the special inspections should be carried out on a real-time basis without any time lag so that the credibility of the inspections can be secured. In other words, the special inspections should be duly carried out to raise the inspection's credibility by eliminating divergence between our inspection results and the public perception - the market's perceptions in particular - on the situation of borrowers as much as possible.

Q.

You have remarked that you will go ahead with the inspections, regardless of the capital adequacy ratio. Do you mean that so far, you have taken the ratio into account?

A.

I am saying a basic principle that the inspections should not be affected by such factors. The capital adequacy ratio will be calculated as a result of inspection, but the actual inspection will be carried out without considering the ratio, and based on the results from such rigorous inspection, we have to draw a conclusion. This principle is not changed at all, and was reconfirmed.