Press Conference by Shozaburo Jimi, Minister for Financial Services

(Excerpt)

(Tuesday, May 17, 2011, from 8:48 a.m. to 8:59 a.m.)

[Opening Remarks by Minister Jimi]

Today, I do not have anything particular to report to you.

[Questions & Answers]

Q.

Regarding Tokyo Electric Power, Chief Cabinet Secretary Edano referred to the option of forgiving debts, and private financial institutions have objected to it. Another minister mentioned the option of reducing interest rates or waiving interest payment. Could you comment on that?

A.

Although I am aware of the reference made by Chief Cabinet Secretary Edano, I would like to refrain from making comments.

As to support for Tokyo Electric Power, it is important to obtain the people's understanding. Needless to say, what support Tokyo Electric Power will seek from stakeholders and how stakeholders, including financial institutions, will respond are matters that should be discussed among the private-sector parties concerned, so I understand that the FSA is not in a position to make comments.

Q.

If so, does that mean that Chief Cabinet Secretary Edano has gone too far by referring to the forgiving of debts?

A.

I would like to refrain from commenting on that.

Q.

Mizuho Financial Group announced losses totaling around 3 billion yen related to its system problem. Have you ascertained that? What do you think of it? Also, now that the on-site inspection of Mizuho Bank has been completed, what will be your future course of actions?

A.

I am aware of the media report to which you are alluding. However, as that is a matter concerning the financial results of an individual financial institution, I, as the person responsible for financial matters, will refrain from making comments.

The on-site inspection of Mizuho Bank was completed on May 13. First of all, the FSA needs to closely examine the content of a report submitted by this bank and the inspection results, so I would like to refrain from making comments on our future course of actions with prejudgment.

Let me remind you that the on-site inspection of Mizuho Financial Group is still ongoing, as you may know.

Q.

I am Inoshita from Toyo Keizai.

Regarding disaster victims' double loan problem, financial institutions in the Tohoku region have presented various proposals, such as the purchase of outstanding loans at the book value. Could you tell me about your view on how to resolve the double-loan problem?

A.

About the double-loan problem, questions were frequently asked at yesterday's session of the House of Representatives Budget Committee, and it is a very serious issue. However, as I repeatedly said, financial institutions over which I have jurisdiction are private institutions. The financial source of loans is deposits entrusted by individual persons, and the basic premise of financial institutions is that they repay deposits with interest. Private financial institutions provide loans on a case-by-case basis. We must take into consideration these characteristics of private financial institutions. As you know, the FSA does not have jurisdiction over government-affiliated financial institutions that engage in policy-based finance. Other ministries, such as the Ministry of Economy, Trade and Industry, the Ministry of Agriculture, Forestry and Fisheries and the Ministry of Land, Infrastructure, Transport and Tourism, have policy-based finance schemes that are suited to their policy objectives. Such schemes may provide no-interest loans and, in some cases, loans with a five-year grace period of principal repayment using funds allocated for interest subsidies under the latest supplementary budget.

Regarding housing, there is the fund for the rebuilding of disaster victims' lives, which may provide 3 million yen in fiscal expenditure when a disaster victim builds a new house after losing a house that was built on the basis of a housing loan. The government as a whole will work to resolve this problem. I mentioned this matter at yesterday's session of the Budget Committee, and it was also taken up at informal meetings of cabinet ministers on various occasions. The Prime Minister reiterated his instruction for relevant ministers to devote serious efforts to this matter. As various ministries are involved, coordination work is essential, and the Chief Cabinet Secretary will be mostly responsible for that. Each minister has now received written instructions, after receiving oral instructions from Prime Minister Kan. As this is really an important matter, we will devote serious efforts to it.

As I have said over and over again, the Minister for Financial Services has jurisdiction over private financial institutions. I think that private financial institutions are somewhat like steam locomotives. Once they have started moving, they gain strong momentum. However, they cannot climb an uphill slope. When high risks are involved, fiscal expenditures or policy-based finance schemes should first play an active role, and it is important for relevant ministries and agencies to carry out the restoration and reconstruction of the disaster areas in cooperation with each other. As the government as a whole deals with this matter, the Prime Minister has reiterated his instruction in that respect, so I will devote very serious efforts to it.

(End)