Press Conference by the Commissioner

(Excerpt)

10 September, 2001

Q.

Minister for Financial Services Hakuo Yanagisawa announced the acceptance of FSAP under IMF during his trip abroad. Please elaborate on the current situation and how you will deal with FSAP, with reference to the timing of FSAP.

A.

As far as I see, Mr. Yanagisawa has been taking the same stance since IMF Managing Director Horst Kohler's recent visit to Japan. There is nothing special about Japan's cooperation with FSAP per se, since Japan, being the second largest shareholder to IMF, fully agreed to the launch of FSAP. Therefore, it is not a matter of the FSA whether to accept it or not, but rather, we should say it is only natural to cooperate with FSAP.

FSAP, which stands for Financial Sector Assessment Program has been translated into Japanese in different expressions. I have a feeling that, the general public may be misunderstanding the subject of assessment. In other words, when we talk about what it aims to assess, it is, abstractly speaking, the vulnerability of the Japanese financial system. Same applies to other countries such as Canada, the UK, and Germany where assessment has already been done or due to be done. It is not to check credit risks of individual banks, but to check the problem in financial system of the country.

In more concrete terms, the program may look into Japan's financial supervision systems as to whether they comply with international core principles. This is an example, and a lot of things will be assessed from many different angles. In any case, proper arrangements should be prepared in advance, as to what will be assessed, how will be proceeded, who will be visited, and how things will be carried out based on arrangements with the parties subject to visit. Furthermore, arrangements will have to be made as to when will be the best time to accept and how long the assessment should be last, considering manpower at both IMF and FSA. I believe Mr. Yanagisawa intended to explain that his staffs would be required to discuss these matters.

Moreover, FSA is not the only party involved in this issue, as, for instance, the Bank of Japan (BOJ) will also be concerned if settlement systems become one of the issues as well. Hence, we would like to decide the timing of the assessment based on thorough discussion with BOJ, as it may also have constrains on its manpower, among other things.

As IMF has a number of developing countries as well as developed countries such as the UK and Germany waiting for FSAP, we believe that IMF also need to make adjustments to its schedule for our assessment.