Press Conference by the Commissioner

(Excerpt)

17 December, 2001

Q.

Nihon Keizai Shimbun dated December 15 reported a rumor on the stock market about a possibility of the reduction of legal capital as a precondition for re-injection of public funds. What do you think about it?

A.

First, I would like to remind you that the current situation does not warrant any exceptional measures stipulated in Article 102 of the Deposit Insurance Law such as re-injection of public funds for capitalization. In case such situation warrants such measures, then exceptional measures will be taken without hesitation, as Prime Minister and Minister Yanagisawa have made clear.

In such a case, re-injection of public funds may be one of the options, but I regard it as risk of rumors that market people suggest such probability. If injection into capital were to be made under Article 102 of the Deposit Insurance Law, capital reduction would not at all be a legal requirement. For example, the necessity of re-injection were to be approved, to a bank, who had accumulated losses that capital reserves or further the paid in capital, capital reduction would naturally be required. However, I don't think such bank exits at present. I don't understand why such rumor spreads on the market that re-injection leads to capital reduction, although banks are retaining surpluses.

Any way, I strongly ask market participants to make investments based on calm and objective views.