Press Conference by the Minister for Financial Services

(Excerpt)

March 20 , 2003

I just came out of a meeting of the Security Council and other engagements in the Prime Minister's Official Residence. I also have the Emergency Measures Headquarters set up within the Financial Services Agency. I would like to report on these matters and so forth.

I have heard that military actions against Iraq started today. In response to this turn of events, the government held an Extraordinary Cabinet Meeting and also established the Emergency Measures Headquarters concerning the Issue of Iraq, headed by the Prime Minister. We have just decided on the measures to be collectively taken by the Japanese government for the time being.

Based on those arrangements, our economic and financial administration in the days ahead will be directed to ensure, in cooperation with other countries, the adequate monitoring of the state of finance and the economy, such as trends of commodity markets, especially crude oil, as well as financial markets, in addition to following the situation in Iraq, and also to take the necessary measures to maintain the stability of the life of the Japanese people, including collective efforts by the government to ensure stable supply of crude oil and the stability of the financial system.

Please note that, supported by those measures, the stock and financial futures markets will basically be open as usual as next week begins.

Since these efforts of the government in the area of finance are described in the document distributed under the title of the 'Statement by Minister for Financial Services,' please refer to that.

I also expect that the Bank of Japan should administer its financial policies in an appropriate and flexible manner in response to, for example, the trends of financial and foreign exchange markets in and outside of Japan.

In addition, the Cabinet Office intends to examine and monitor commodity price trends, especially those which are closely related to the life of the Japanese people, and also ensure that, upon keeping in close contact with the authorities concerned, relevant information will promptly be made available broadly to the general public, regarding supply-demand and price trends of commodities that serve as daily necessities, a major example of which is oil.

As the government is thus determined to take every possible measure, we request the general public to respond with calmness as well.

Q.

Has there been any new measure issued by the Emergency Measures Headquarters within the Financial Services Agency, other than the six items of ''Measures for Ensuring Proper Operations of Stock Markets'' released in last week? Limitation on the price range, for example?

A.

Our basic stance is monitoring the markets while maintaining close exchange of information with the relevant authorities, and that's what we are actually doing now. As I mentioned earlier, I feel that responses from the markets remain calm. So I am not planning on taking any immediate measure at this point in time.

Q.

Could you please explain in specific terms what the government is going to do as a measure to maintain the stability of the financial system?

A.

I believe that what is most important for the time being is, after all, to ensure liquidity in markets. While this is an important task that should principally be dealt with by the Bank of Japan, we are eager to see to it that no problem should occur in that aspect, by making contact with the Bank of Japan.

For the financial system itself, with respect, for example, to the state of the forthcoming account closing of banks or their capital adequacy ratios, it seems unlikely to me that any problem should arise at all out of the current situation, considering the on-going stock price trend etc.