Press Conference by Yuji Yamamoto, Minister for Financial Services

(Excerpt)

June 12, 2007

[Minister's Statement]

Good morning. I would like to report on the Cabinet meeting. The Minister for Foreign Affairs made remarks on Japan's sponsoring of the next Group of Eight summit. The minister stated that the annual meeting following the Heiligendamm summit will take place at the Lake Toya resort in Hokkaido July 7-9 next year. This means that consent has been made in regards to the schedule. The Chairman of the National Public Safety Commission made remarks on security measures for the Lake Toya summit. The Chief Cabinet Secretary reported on the creation of a preparatory conference for the Hokkaido Lake Toya summit. The Chief Cabinet Secretary said he would chair this conference. The Minister for Gender Equality and Social Affairs reported on FY 2006 traffic accidents and traffic safety measures and the FY 2007 plan on traffic safety measures. The Minister of Land, Infrastructure and Transport reported on FY 2006 tourism conditions and FY 2007 tourism measures. I made remarks on a report on the details of measures taken for the disposal of failed financial institutions. The Minister for Foreign Affairs reported on the regular Japan-EU summit and the G-8 Heiligendamm summit. The Minister of the Environment made remarks on the president of the Japan Environmental Safety Corporation. That concludes my remarks.

[Questions and Answers]

Q.

Regarding yesterday's business practice improvement order for Mitsubishi UFJ Financial Group Inc., I believe that the bank may have failed to give due consideration to customers. What is your view on this matter?

A.

First of all, a series of sanctions have been issued against the group since December last year. The U.S. authorities issued a business practice improvement order regarding money laundering. In January, upon the beginning of a new year, we issued an administrative sanction against the group over securities transactions on its own account based on corporate information. In February, we implemented a sanction over the group's involvement with an anti-social group at its Awaji branch for corporate customers. On June 11, sanctions were given over an overseas incident and investment trust fund sales. Sanctions against the group have been repeated. The group is a financial institution that should give top priority to creditworthiness. It is Japan's top megabank. Therefore, I really want the group to be more tense, to make further efforts and to grind.

Q.

Regarding Mitsubishi UFJ, I believe that some have noted that Mitsubishi's past forcible actions in regards to its merger with UFJ may have incurred some problems. In this respect, it was pointed out yesterday that the problem may have emerged from the adoption of Mitsubishi rules for sales of investment trust funds as the merger was approaching. What do you think about the problems regarding merger procedures?

A.

I believe that we cannot generally conclude that the merger had anything in particular to do with the practices that have required the issuance of administrative sanctions. If such conclusion is reached for the two banks in question that have merged to form the Bank of Tokyo-Mitsubishi UFJ, however, the bank should reflect on past practices and make improvements. In this sense, such a conclusion may require due consideration. Generally, however, mergers do not necessarily lead to a series of administrative sanctions. In this sense, we would like to ask the financial institution in question to reflect seriously on these problematic practices.

(End)