Press Conference by Yuji Yamamoto, Minister for Financial Services

(Excerpt)

June 5, 2007

[Minister's Statement]

Good morning. I would like to report on the Cabinet meeting. The Minister of Land, Infrastructure and Transport made remarks about the FY 2006 annual report on development in the Tokyo metropolitan region and on personnel changes at Honshu-Shikoku Bridge Expressway Company Limited. The Minister of the Environment made remarks on the FY 2007 white paper on the environment and the recycling society. The Minister for Foreign Affairs made remarks on his participation in the eighth ASEM (Asia-Europe Meeting) foreign ministers meeting and the Group of Eight foreign ministers meeting, his European tour and a Japan-China-Korea foreign ministers meeting. Minister of Defense Kyuma reported on the participation in the Asian security conference. At a ministerial meeting, the Minister for Gender Equality and Social Affairs made remarks on the Social Policy Council's report on how best to ensure national life security and safety. That concludes my remarks.

[Questions and Answers]

Q.

Regional banks' annual financial statements indicate a widening strength gap. What is your view on this matter?

A.

Of the listed regional banks, 15% reported profit declines. Ratios of nonperforming loans to overall loans reportedly remain at high levels, above 4%. Their performances were mixed. We would like to watch whether this tendency continues. Overall, nonperforming loan ratios decreased. From what we can tell, their earnings were robust. We hope that regional banks with some financial problems will develop along with regional companies while receiving reliable advice on sound management.

Q.

Last week, ShinGinko Tokyo announced a substantial loss. Among new banks, it indicated a widening gap with well-performing banks such as Seven Bank. What is your view on this matter?

A.

Intensification of competition is an indisputable fact. Inaugurations of new banks always run the risk of poor timing. Therefore, bank managers should improve their management based on characteristics of their markets, their special skills and development of new products. We plan to continue to implement firm supervision and inspection. I would like for banks to take this point into account in conducting their business.

(End)

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