Press Conference by Shozaburo Jimi, Minister for Financial Services

(Excerpt)

(Tuesday, November 2, 2010, from 10:25 a.m. to 10:37 a.m.)

[Opening Remarks by Minister Jimi]

I have nothing in particular to report to you today.

[Questions & Answers]

Q.

I would like to start with the subject of major banks' performance.  One after another of the major banks, such as the Sumitomo Mitsui Financial Group, have revised their financial forecasts upwards, which presumably reflects their positive results for the interim period.  Please tell us how you evaluate this point.

A.

I am aware that leading banks have raised their earnings forecasts for the period ending September 2010 but, considering that, at this point in time, none of the banks has announced the final figures for the period ending September 2010 yet, I would like to refrain from making any comments from the viewpoint of the Financial Services Agency (FSA).

In any case, the final figures should eventually come out and I find any good results of Japanese financial institutions to be essentially very welcome news if one reflects on how grave a situation they were in 12 years ago.

Q.

With Takefuji apparently poised to have its reorganization sponsor determined by March of next year now that the commencement of its reorganization plan has been approved, please give us your view, including any prospect in the sponsor selection.

A.

I understand that the case of Takefuji has been approved by the Tokyo District Court for the commencement of corporate reorganization proceedings.  I recognize that the company remains under the intervention of the court and is to proceed in accordance with the corporate reorganization proceedings.  The FSA is intent on addressing appropriately any consultation requests, etc. from the company's customers and other parties concerned, working in partnership or in cooperation, from a viewpoint of user protection, with organizations like Local Finance Bureaus nationwide and prefectural consumer centers.

I am aware from newspaper articles that a little less than 20 companies have offered to assist Takefuji, but I would like to refrain from making any comments from the viewpoint of the authorities.

Q.

I am Sonoda from Hokenmainichi Shimbun.

As I hear that the discussion of the Insurance Business Act amendment bill will be started shortly, I would first like to know when it is likely to be started and would also like to know if there is any possibility that its contents be revised, given that word is apparently going around that it might prove too high a hurdle for the respective administrative authorities to supervise.

A.

I take it that you are asking about the proposed amendment to the Insurance Business Act that has been passed to the current session for continued deliberation.  I assume that you are questioning the appropriateness of a mutual aid business of a public interest corporation or the arrangement in which a mutual aid business of a given public interest corporation is to be supervised by the former competent authorities, with an implication that the FSA should be responsible for supervision.  Well, the fact is that the respective authorities, having the experience of supervising public interest corporations for a long time, are well-versed with specifics of their operation.  On the subject of this Act, I believe that I named several examples the other day, such as the Japan Medical Association, which has always been supervised by the Ministry of Health, Labour and Welfare since the Meiji era, including the years of supervision by its predecessor, the Health and Medical Bureau of the Ministry of Internal Affairs.  While circumstances vary from authority to authority, they know very extensively about internal affairs of those corporations and have exercised thorough supervision and, in that sense, have a set of knowledge of their operation and other information accumulated in the course of the work of supervision in the past, which accordingly makes them presumably capable of delivering more fine-tuned supervision than the FSA would be.  Since the most important thing is policyholder protection, we believe that, from such a perspective, having the former authorities supervise them is an appropriate way to go.  It is also in comprehensive consideration of overall circumstances, including the fact that this exemption of the Act is a provisional step, that we find it appropriate to have the former authorities continue to supervise those corporations.  My understanding is that the deliberation of this matter will begin today in the Financial Committee of the House of Representatives.  Seeing as the Act is an agenda item continued from the last session, I am eager to ensure a thorough discussion as the head of the administrative agency submitting the bill.

Q.

I am Inoshita from Toyo Keizai.

On the subject of the Incubator Bank of Japan, could you please fill us in with its current status, including the progress of the ongoing assessment of its assets, if you have received any report?

A.

So far, I have not recently been updated about the Incubator Bank of Japan and what I know is limited to the information from newspaper articles. As you know, however, this represents the first ever case that triggered the implementation of the so-called payoff program after World War II.  This is, therefore, a very significant issue and I have been following it with great care, but I have no up-to-date information at hand.

This subject also came up during the Financial Committee of the House of Representatives last week and I feel confident that the Deposit Insurance Corporation of Japan will proceed in an authoritative fashion in accordance with law.

Thank you very much.

(End)