Press Conference by Shozaburo Jimi, Minister for Financial Services

(Excerpt)

(Tuesday, July 13, 2010, from 11:42 a.m. to 12:03 p.m.)

[Questions & Answers]

Q.

Yesterday afternoon, there was a glitch in Japan Post Bank's system linked to other financial institutions, making it impossible to remit and withdraw funds from ATMs nationwide. The system reportedly recovered by this morning. What do you think about such a large-scale glitch?

A.

As you just mentioned, I received a report that a fault had occurred in the computer system at 3:22 p.m. yesterday, making it impossible to handle ATM cash deposits and withdrawals between Japan Post Bank and allied financial institutions, as well as remittances of money from Japan Post Bank to other financial institutions by ATM, over the Internet, or other such means. The cause of the fault was reportedly a hard drive failure. No problems were reported in Japan Post Bank's inter-account transactions. The problem concerning ATM cash deposits and withdrawals between Japan Post Bank and allied financial institutions was subsequently resolved at 8:38 p.m. yesterday. Then, the system affecting the remittance of money from Japan Post Bank to other financial institutions at the counter, by ATM and over the Internet also recovered at around 8:50 a.m. today, according to the report I received.

Japan Post Bank has to do everything it can in dealing with customers, and properly identify the causes of the fault and formulate measures to prevent it from happening again. This will be strictly enforced, as the basic role of financial regulation and supervision is to facilitate user convenience and protect users.

It is extremely regrettable that such an accident has occurred. The Financial Services Agency (FSA) is requesting Japan Post Bank to provide a detailed report on the facts and an analysis of the causes. Based on the findings, we will continue to do our best to prevent the recurrence of such an accident.

Q.

I am Sonoda from Hokenmainichi Shimbun.

Have the Upper House election results brought about any changes in the prospects for the passage of the bill for mutual aid enterprises (the bill for revising the Insurance Business Law)?

A.

The bill seeks to establish exceptions to the rule of the Insurance Business Law for mutual aid enterprises that have been operating since before the amendment of the Insurance Business Law in 2005, provided that certain criteria are met, and enable them to continue operations subject to supervision according to their actual status for the time being, while ensuring the protection of policyholders and other parties. At the close of the previous ordinary session of the Diet, the decision was made at the Diet to continue the deliberation of the bill (instead of scrapping it). The FSA will strive to get the bill enacted promptly.

Q.

Given that Japan Post Bank will be required to make a report, may we assume that the FSA will consider taking administrative action depending on the content of the report?

A.

Pursuant to Article 24 of the Banking Law, in the event of a fault in the computer system, the Bank had been ordered in advance to submit a report on the facts, the causes of the fault, measures to rectify the situation afterward and so forth. I believe such a report will be submitted in regard to the latest system failure.

As to whether the FSA will take administrative action, such as issuing a business improvement order, as the Minister in charge of this matter I would like to refrain from commenting on our future administrative approach to an individual financial institution. Generally speaking, however, if any problems are identified, the FSA will take supervisory action as required, as a matter of course.

(End)