Press Conference by Shozaburo Jimi, Minister for Financial Services

(Excerpt)

(Wednesday, November 24, 2010, from 10:33 a.m. to 10:46 a.m.)

[Questions & Answers]

Q.

Amidst the scenes that are unfolding on the Korean Peninsula, we are witnessing turns of events, such as the Nikkei Stock Average beginning the day in the 9,000 yen range, thus dipping below 10,000 yen.  Please tell us your view on impacts of the incident on markets.

A.

While it is presumably a likely consequence after some military incident that markets react in various ways, I would like to refrain from commenting, in the capacity of my position, about markets.  That said, I do feel the need to follow any developments in a calm fashion.

Q.

With Ireland requesting financial assistance from the EU and the IMF (International Monetary Fund), please give us your thought on this.

A.

I understand that the Irish government announced that it had requested financial assistance from the EU and the IMF, which then responded with an announcement that they would provide financial assistance that Ireland needs to carry out its fiscal reform plan and stabilize its banking system.  While an array of reports are appearing in newspapers, I also know that the G7 finance ministers have issued a statement in support of those actions, saying that they "welcome Ireland's announcement on its aid request," and the Financial Services Agency (FSA) also welcomes the series of those announcements.

A variety of figures are also being reported in the media as well, but I hear that they are subject to ongoing negotiations now.  I have hopes that an agreement on the specifics of the assistance plan will be reached before long between the Irish government, the EU, the European Central Bank (ECB) and the IMF, and I will continue following its progress carefully.

Q.

I am Sonoda from Hokenmainichi Shimbun.

Apparently, a plan of creating a framework whereby the private sector bears the duty of managing the earthquake reinsurance special account has emerged from the budget screening process - please give us your view on this.

A.

I understand that discussion has been held during the budget screening process as to the fate of the earthquake reinsurance special account, but budget screening is part of a policy decision-making process before a conclusion is made.  Just as in the case of the Great Kanto Earthquake, an earthquake can bring about tremendous damages and it is therefore not readily feasible for any single private company to assume its risk.  For that reason and others, the purpose of the discussion is to run a quick check to see whether it is possible to design a concrete system and whether it will be possible to abolish the special account by doing so, on the premise that peace of mind of insurance policyholders should not be compromised and on the condition that, in the course of transferring authority to any entity other than the national government, the government should be involved by means of a government guarantee or something of that sort.  As anything that comes out of the budget screening process is not a final decision, the FSA is intent on following the progress of screening so that peace of mind of earthquake insurance policyholders should not be compromised.

(End)

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