Press Conference by the Commissioner

(Excerpt)

10 December, 2001

Q.

Today, bank stocks are sharply falling. What does the Financial Services Agency think about this fall?

A.

We are very much concerned about it. I suppose the market sells bank stocks because they have a fear that banks are exposed to greater credit risks. At the announcement to revise their forecasts of full-term performance, major banks said they are ready to add 4 trillion yen to provision for bad loans for the full term, but the markets are doubtful about this amount. Major banks have disclosed such information transparently. It is difficult to understand why there are still suspicions or why this kind of atmosphere is being generated. I am paying cautious and constant attention to how markets make their assessments.

Q.

I want to ask about Asahi Bank and Aoki Construction. Although at the beginning, the market was urging Asahi Bank to dispose of loans to Aoki Construction quickly, after the Bank actually made the decision, the market did not seem to appreciate Asahi Bank' decision. What do you think about the fact that although a bank took a decisive action in response to market's demand, the markets do not appreciate the bank's decision?

A.

I don't want to refer to individual companies, but immediately after Aoki Construction applied for court protection under the Civil Rehabilitation Law, Asahi Bank announced that no downward revision to its full-term forecasts was needed. I believe, therefore, the influence of this incident on Asahi Bank will be limited, and I'm not concerned. You raised a question about the current market sentiments. I also have the same question about them.

The markets, however, moves according to various factors. So, my remarks are never intended to go against the assessment of the markets. I ask you not to misunderstand my point.