Press Conference by the Commissioner

(Excerpt)

December 2 , 2002

Q.

The work schedule of the Program for Financial Revival includes the utilization of the Early Warning System prior to making the so-called prompt corrective actions stricter. There is the Early Warning System on one hand, and making prompt corrective actions much stricter on the other. How are they defined?

A.

Prompt corrective action means that prompt correction will be required especially when the capital adequacy ratio falls below 8% or 4%. There are a number of categories in which corrective action is taken.

The Early Warning System is regarded as a scheme in the stage before that, in which problems are to be identified promptly from various angles and improvements are to be made in a preventively.

Q.

The Program for Financial Revival refers to ''Special Support Financial Institutions''. To what extent support is given to Special Support Financial Institutions?

A.

This is as described in the Program. The section on the Special Support framework is followed by a paragraph on special loans of the Bank of Japan (BOJ) and injection of public funds based on the Article 102 of the Deposit Insurance Law. In other words, they are financial institutions that are subject to the aforementioned actions due to capital shortage, managerial difficulties or similar circumstances.

Q.

Will the Task Force on Financial Issues only be targeting Special Support Financial Institutions? Or will it be targeting other financial institutions in general or major banks? What is its target?

A.

Under the current Program for Financial Revival, the job of the Task Force on Financial Issues is to check the status of non-performing loans (NPLs) being disposed of by major banks and the status of Special Support Financial Institutions.