Press Conference by the Minister for Financial Services

(Excerpt)

November 5 , 2004

Q.

A wide range of opinions were expressed by the members of the advisory team at yesterday's meeting on the first and second tasks referred to in the Basic Policies for Economic and Fiscal Management and Structural Reform 2004. In your opinion, what were the important points raised in yesterday's discussion?

A.

Yesterday, the members of the advisory team discussed the basic viewpoints on formulating a new program dubbed the Program for Concentrated Consolidation of the Financial System (tentative name), and exchanged opinions primarily about the first and second tasks, as just mentioned, among the five tasks specified in the Basic Policies for Economic and Fiscal Management and Structural Reform 2004. Regardless of whether or not we ultimately settle the problem with these five tasks, we are going to have discussions based on the five tasks.

One of the basic view points presented in yesterday's discussions is that the Japanese financial environment is coming to change, that is, we may be moving on from the existing phase in which efforts have been focused on the non-performing loan problems, to a phase characterized by competitiveness enhancement, in which further enhancements in international competitiveness are to be steadily made. The members suggested that it may be vital to adopt such a basic point of view.

They also commented that the financial industry would be a highly strategic sector for the Japanese economy in the future, and the message conveyed by the program should reflect the industry's strategic status accordingly.

In the discussions based on the first and second tasks presented in the Basic Policies, the members pointed out that it would be important to strategically utilize IT for both the financial administration and the top management of financial institutions in the future.

They also stated the importance of establishing a trustworthy financial administration, and for the purpose of achieving this, the importance of the Financial Services Agency being fully accountable.

In addition, they suggested that it would be necessary to review whether or not unnecessary regulations are still remaining, if the government is to enhance the financial functions based on the vitality of private sector.