Press Conference by the Minister for Financial Services

(Excerpt)

May 20 , 2003

Q.

The injection of public funds into the Resona Bank is absolutely different from a measure for a failed or insolvent financial institution. It is intended as assistance to the bank in its recovery. It is, we think, a preventive measure in a sense. Do you think that current scheme for the injection of public fund is adequate as a preventive measure based on your experience in this event?

A.

As I said on previous occasions, the capital adequacy ratio of the bank whose assets are over 40 trillion yen fell considerably short of 4%, which is the minimum requirement for sound domestically operating banks. The Article 102, therefore, is appropriately applicable to this case to avoid a financial crisis.

The Financial System Council is deliberating whether the current law is adequate for addressing various cases or any new statutory regulations are necessary. I expect that the Working Group in the Council will make a conclusion, which is scheduled to be made in a month, about the necessity of new scheme for the injection of public funds by considering possible situations and others.