Press Conference by Kaoru Yosano, Minister of Finance and Minister for Financial Services and Economic and Fiscal Policy

(Excerpt)

May 19, 2009

[Opening Remarks by Minister Yosano]

As the cabinet meeting proceeded based on the predetermined agenda, I do not have anything particular to report to you.

Q.: Regarding the financial sector, the financial results of all major banks will become known today. Could you tell us how you feel about the financial results of banks and the very difficult situation of regional banks?
A.: Banks’ losses reflect declines in net business profits and valuation losses on their holdings of stocks and other assets. There may also be other losses. Banks are setting aside reserves to cover losses, and are writing off losses and enhancing their capital bases. The fact is that compared with when major banks previously tried to raise capital on their own, there are much more people who subscribe to the offering of new shares, so capital-raising by financial institutions are now proceeding more smoothly than expected. I believe that banks’ management approaches are right as they have properly written off losses or set aside loss reserves and are moving to increase their capital as necessary in order to ensure sound management. Meanwhile, regional banks have been greatly affected by the condition of the real economy. However, there is apparently no financial institution that is in a crunch, so I believe that Japan’s financial system as a whole maintains a high degree of soundness.

(End)