Press Conference by Yuji Yamamoto, Minister for Financial Services

(Excerpt)

December 15, 2006

Q.

My first question concerns the public bid for Ashikaga Bank, for which application will be closed today, regarding which rumor has it that the number of bidders will probably be five or more. Please tell us what you think about the bidding prospects and also, once again, your approach to the selection of an acquiring party.

My second question concerns press reports which allege that the Financial Services Agency (FSA) is poised to issue an order against ACOM, a major consumer loan company, imposing the suspension of part of its business operations for several days. Reportedly, this is due to a suspected cover-up of transaction records, which should serve as the basis of reimbursements for the so-called gray zone interest payments. I would like to ask your opinion on this incident, as well as provide me with the facts thereof, etc.

A.

On the subject of the Ashikaga Bank acquisition, I cannot give any comments because public bidding remains open until today. That said, the FSA is determined to work hard to select an appropriate acquirer so that the bank will be able to establish trust from users and exert its financial intermediation functions in a sustainable fashion in the region in and around Tochigi Prefecture after its transfer to the acquiring bank, as it has done in the past.

About the question on ACOM, it is rather difficult for me to comment on it, considering our practice of refraining from making references to any individual cases at a stage prior to the implementation of administrative measures. Still, I have some difficulty understanding why such news articles appear and, having heard nothing about ACOM in the context suggested by these reports, they strike me having come out of nowhere.

Q.

Can you please share your views on the securities tax regime?

A.

Given the decision to discontinue the current securities tax regime after a one-year extension, which is different from the idea of a straightforward extension for which I have been expressing my support, that which I had requested did not quite receive full approval. On the other hand, do I have high hopes that how a future securities tax regime should be formulated will be discussed in further depth among the ruling parties, seeing that there is a plan to develop a final proposal, with the intention to introducing it in FY 2009, upon deliberating factors such as the state of securities markets and the asset holding patterns, particularly in regards to stocks, of individual investors, and examining steps to, for instance, expand the eligibility of profits and losses from different financial products for combined taxation purposes. Further still, I also believe that it is important to secure the international competitiveness of Japan's financial markets and capital markets by fully taking into account our basic policy of making a shift from "savings to investment," the issue of double taxation on dividend income and capital gains, and comparisons with financial and securities tax regimes of other countries. I thus hope that those in the position to discuss what a desirable securities tax regime should be will do so upon full consideration of the points to which I have referred here.

(End)