Press Conference by Shozaburo Jimi, Minister for Financial Services

(Excerpt)

(Friday, February 25, 2011, from 7:41 a.m. to 7:54 a.m.)

[Opening Remarks by Minister Jimi]

As the members of the Committee on the Review of Administrative Actions regarding the Incubator Bank of Japan (Nihon Shinko Ginko) have been selected, I am announcing the lineup.

As shown in a paper distributed to you, Mr. Keimei Kaizuka, honorary professor at the University of Tokyo and member of the Japan Academy, was appointed as a counselor. He is a former dean of the University of Toyko's Faculty of Economics, as you know, and he is also a nephew of Dr. Hideki Yukawa (a Nobel Laureate). His father is Shigeki Kaizuka, a Chinese literature scholar and professor at Kyoto University who received the Order of Culture.

Mr. Yoshiro Kusano, a former judge at Hiroshima High Court who is now a professor at Gakushuin University's Faculty of Law and Graduate School of Law, was selected as the chairman of the committee. Also selected as committee members are Mr. Koetsu Aizawa, a professor at Saitama University's School of Economics and director at the Society of the Economic Studies of Securities; Mr. Yukio Akamatsu, a former prosecutor who now practices law; Mr. Osamu Kamoike, a professor at Tohoku Fukushi University's Faculty of Comprehensive Management who is also an honorary professor of Tohoku University and director of the Japan Society of Monetary Economics; and Hidehiro Kikuchi, president of the Japan Monetary and Financial Policy Research Institute. They will be appointed as advisors (part-time) to the Financial Services Agency (FSA).

I made the selection from the viewpoint of the need for the six members of the committee to appropriately review administrative actions taken in relation to the Incubator Bank of Japan. We are making scheduling adjustments to fix the date of the first meeting. As soon as the adjustments are finished, we will hold the meeting.

In light of the fact that this committee handles information concerning the inspection and supervision of a specific financial institution, the process of review will not be open to the public. However, its reports will be made public in principle.

That is all I have to say.

[Questions & Answers]

Q.

You said that the first meeting will be held as soon as the scheduling adjustments are finished. Could you give me a more specific timeframe? Also, regarding the proceedings of the review, how many times is the committee expected to meet?

A.

As we asked experts with adequate knowledge and experience to sit on the committee, we would like to hold the first meeting as soon as possible. However, I should leave it to the committee members to make a decision, rather than mentioning a date with a preconceived idea.

Q.

Do you mean that the members will decide how the review will proceed, too?

A.

I suppose so.

Q.

It is stipulated that the review committee is responsible for reviewing administration actions taken in relation to this bank. Could you elaborate a little more, including on the purpose and background?

A.

I believe that the purpose is to review the background to the foundation of the Incubator Bank of Japan, and legal and administrative actions taken in relation to the bank, and report the results of the review to the Minister, Senior Vice Minister and Parliamentary Secretary.

Q.

Do you mean that the review will cover problems related to the supervision and inspection that may have led to the bank's failure?

A.

As this is a review, they will naturally be included in administrative actions. However, as we are entrusting the review to the committee comprising those excellent experts, basically I would like to leave it to the experts to make judgment.

Q.

I have one more question. The situation in the Middle East has grown tense, producing an impact on the foreign exchange and crude oil markets. How do you expect the situation to affect the financial sector in a broad sense?

A.

I am aware that the tense situation in the Middle East has been cited as a cause of global stock price falls, as was mentioned now. According to newspaper and television reports, in particular, the situation in Libya, an oil-producing country, has grown very tense. Therefore, the government held a meeting of relevant ministers to discuss the situation in the Middle East on Tuesday, February 22. The FSA will closely monitor how the situation will affect the financial market.

Q.

In relation to the review committee, you said that you will leave it to the committee members to decide how to proceed with the review. Is it possible, for example, that people involved in the granting of a license to the Incubator Bank of Japan will be summoned for a hearing?

A.

As I said, it is up to the committee members to decide from their fair and neutral standpoint specifically how to proceed with the review. As I believe that people with excellent judgment, knowledge and experience in their respective fields have agreed to sit on the committee, I would like to refrain from answering your question with a preconceived idea.

Q.

Do you have any desirable deadline for the submission of a report in mind?

A.

As I will ask them today to serve as advisors to the FSA, it would not be appropriate for me to mention that now with a preconceived idea.

Q.

What is the difference between the roles of the advisor and chairman of this committee?

A.

Mr. Keimei Kaizuka formerly served as the dean of the University of Tokyo's Faculty of Economics, counselor to the Ministry of Finance's Policy Research Institute and advisor to the Bank of Japan. His stature is such that he gives lectures to FSA staff. He is the eldest son of a brother of Mr. Hideki Yukawa. As advisor, he will make suggestions and give instructions concerning overall matters. A man of such stature is suited to the post of counselor.

The chairman will review various specific matters. Thus, Mr. Keimei Kaizuka will oversee overall activities while the chairman will be responsible for practical work. I will leave it to the chairman and Mr. Kaizuka to make judgment in that respect. I told them that an arrangement like this will likely make it easier to obtain the people's understanding and help to achieve our objective of regaining lost trust in financial administration. From that perspective, I selected these people and obtained their consent.

Q.

Why have you decided to appoint them as advisors? Also, will there be a fixed term of office?

A.

I have decided to do so since they will be subject to the confidentiality obligation under the National Public Service Act in light of the fact that they will handle information concerning the inspection and supervision of a specific financial institution.

Q.

Although it will be left to the committee members to decide when to hold the first meeting, will it be held next month at the earliest?

A.

They are all busy people. However, now that we have made an announcement, the sooner, the better. As for the committee members who are university professors, I hear that they will have more time to spare in March. In April, they will be busy as freshmen arrive on the campus. While it is up to the committee members to fix the date, I am hoping that such circumstances will be taken into consideration.

Thank you very much for your kind attention.

(End)