Press Conference by Shozaburo Jimi, Minister for Financial Services

(Excerpt)

(Friday, Sept. 2, 2011, from 10:28 p.m. to 11:19 p.m.)

[Opening Remarks by Minister Jimi]

I am Shozaburo Jimi of the People's New Party. I have been reappointed as the Minister for Financial Services and Postal Reform. I would appreciate your continued support.

Following my reappointment, I received instructions from the Prime Minister with regard to three matters.

First, I was instructed to make efforts to ensure the stability of financial functions and to facilitate regional financing. Second, I was instructed to implement measures to relieve the overlapping loan problems that afflict the people and companies affected by the Great East Japan Earthquake. Third, I was instructed to steadily promote reform of the postal businesses, including an early enactment of postal reform-related bills that have already been submitted to the Diet, in close cooperation with the Minister of Internal Affairs and Communications. I will do my utmost to tackle these tasks based on these instructions.

First, let me express my resolution regarding financial administration. As the minister in charge of financial administration, I will ensure that finance adequately plays its role - to use a medical analogy as I am a doctor by profession - as the heart and lifeblood of the economy. Specifically, it is important to ensure the stability of the financial system and the exercise of financial intermediary functions. As you know, the markets have remained in an unstable condition, and there are growing moves to avert risks around the world because of the fiscal and financial problems in Europe and the economic slowdown in the United States. I will brace myself for these challenges and strive to take appropriate actions so that the soundness of the financial system can be ensured and the financial intermediary functions can be smoothly and actively exercised.

As for response to the earthquake disaster, the financial sector has a very important role to play in restoration and reconstruction after the disaster. On March 11, immediately after the earthquake occurred, I issued instructions to financial institutions in the Tohoku region and Ibaraki Prefecture, including regional banks, Shinkin banks, credit cooperatives, which together have 2,700 retail branches, as well as life and non-life insurance companies and securities companies. As the financial sector has a very important role to play in the restoration and reconstruction efforts, I have until now continued to urge these financial institutions to take appropriate and flexible actions in light of the actual circumstances of the disaster areas. We are continuing to urge them to do so, and are encouraging them to positively consider making use of the Revised Act on Special Measures for Strengthening Financial Functions that was put into force in July. This act, which is something like a special law intended to deal with the impact of this huge earthquake and the once-in-a-millennium tsunami, was enacted on June 22 with the unanimous support of all parties and put into force in July. At the same time as encouraging financial institutions to positively consider making use of it, we will do our utmost to support the reconstruction of the disaster areas by resolving the overlapping loan problem and supporting the management of the Guidelines of Workout for Restructuring Debt Owed by Individual Debtors.

Let me cite earthquake insurance as an example. The General Insurance Association of Japan provided active cooperation in this respect. As I have mentioned several times, the assessment of the extent of damage is critical to the non-life insurance business. As many houses were swept away by the tsunami, a non-life insurance company belonging to the association took the very flexible step of conducting area-by-area damage assessment based on aerial photographs. As has been reported by newspapers and other media, earthquake insurance claims totaling 1.13 trillion yen have already been paid in the six prefectures of the Tohoku region and Ibaraki Prefecture. The payment amount was the largest in Miyagi Prefecture, where earthquake insurance claims totaling more than 500 billion yen have been paid.

When the chairman of a bank with nation-wide operations recently came to me after being re-elected at the general shareholders' meeting, he told me about an increase in deposits at his bank's Sendai branch. I had presumed that depositors would normally withdraw deposits after disasters like an earthquake and tsunami. When I asked for the cause of the increase, he cited as a probable cause the payment of earthquake insurance claims totaling more than 500 billion yen in Miyagi Prefecture alone. People planning to rebuild houses have apparently deposited money at banks first. That has led me to think that the effects of the Financial Services Agency's (FSA's) efforts, such as negotiating with the Cabinet Legislation Bureau even during the Golden Week holiday season, may have started to appear in relation to earthquake insurance.

We will continue to do our utmost with regard to matters like that. When the FSA made new personnel appointments, I instructed the Director-General of the Supervisory Bureau to visit the Tohoku region first of all in relation to the Act on Special Measures for Strengthening Financial Functions. For financial institutions in the Tohoku region, including regional banks, Shinkin banks and credit cooperatives, now is the most critical time, so I believe that political decisions and the enforcement of this law are essential. To ensure that the law is used as much as possible, I instructed the new Director-General of the Supervisory Bureau to visit the Tohoku region first of all.

Regarding the facilitation of financing, the business conditions and fund-raising situation of small and medium-size enterprises (SME) continue to be severe due to the impacts of the earthquake disaster and the strong yen. Therefore, we will continue to encourage financial institutions to actively exercise their financial intermediary functions. In this respect, we will ensure that positive effects will be produced by the one-year extension of the SME Financing Facilitation Act, which was approved in the previous Diet session, and by the exercise of consulting functions, which is prescribed in the supervisory guidelines.

Regarding international financial regulatory reform, it is necessary to implement various actions to strengthen the financial system, including ensuring the soundness of financial institutions and developing financial infrastructure, through international cooperation based on the lessons of the financial crisis that followed the Lehman shock. In particular, the financial globalization has advanced very far, as you know, so one country can no longer go it alone. Many countries need to take coordinated policy measures, as the G-7 and G-20 countries are doing. On the other hand, it is necessary to provide a sufficient transition period when implementing reforms like that. The situations and circumstances of financial institutions differ from country to country, so we need to give due consideration to the potential impact on the real economy, for example by providing a sufficient transition period. In particular, Japan has strongly made such an argument at international conferences. As Japan experienced a financial crisis a little more than a decade ago, we should bear its lessons in mind. For example, the higher a bank's capital adequacy ratio, the sounder it is. However, if banks are forced to raise their capital adequacy ratios in a short period of time, they will excessively tighten their lending stance, leading to severe contraction of the real economy. That is what we experienced. We must keep the right balance between the soundness of banks and the impact on the real economy, although that is rather difficult in a liberal, democratic society. However, Japan has endured the bitter experience of the financial crisis that started in 1997, so we will participate in international debates with that in mind. After various financial institutions failed, a legal framework was developed in the Diet session of 1998 that focused on the financial crisis.

Lastly, I would like to express my resolution regarding postal reform. I recognize that it is an important task to revive the weakened postal services and develop them into services that are really beneficial for the people. As I earlier mentioned, the basic plan for the post-earthquake reconstruction that was decided by the cabinet prescribes that the three postal businesses bond closely together, which is important. When I visited the disaster areas, I felt the importance of the role that post offices used to play in maintaining bonds between people, and its bonds with the local community. The post-earthquake reconstruction plan prescribes that the postal reform must be carried out properly from that perspective, too. I understand that this is an important task that we must tackle with that in mind.

To carry out the reform, I believe that it is an urgent task to enact the postal reform bills quickly. On Tuesday, August 30, an agreement was reached between Prime Minister Noda, who is the new leader of the Democratic Party of Japan, and Mr. Kamei, the leader of the People's New Party, that in light of the severe situation of the postal businesses, efforts should be made to secure an agreement on those bills - the People's New Party and the Democratic Party have been working together on the bills for as long as four years - as the top priority matter through inter-party revision consultations and enact them in the next extraordinary session of the Diet. Cabinet ministers will work together toward quick enactment of the postal reform bills under the Prime Minister's leadership.

As the Minister for Financial Services, I am resolved to devote myself wholeheartedly to the various tasks that I mentioned. I will appreciate your continued support and your opinions.

That is all I have to say.

[Questions & Answers]

Q.

Regarding the postal reform bills that you mentioned, Prime Minister Noda apparently intends to give consideration to the views of the Liberal Democratic Party (LDP) and the New Komeito in Diet deliberations. How do you plan to ensure the enactment of the postal reform bills, which the LDP opposes? Also, I would like to ask you what the key issues will be in the revision negotiations.

What is your impression of Minister of Internal Affairs and Communications Kawabata, who will be your partner in efforts toward the enactment of the postal reform bills?

A.

As for the postal reform bills, as the head of an administrative organization, I have submitted the bills that have been decided by the cabinet in the belief that they are the best.

However, as I said earlier and as was reported in newspapers, Prime Minister Noda, who is the DPJ's leader, and Mr. Shizuka Kamei, who is the leader of the People's New Party, have signed an agreement stating that in light of the severe situation of the postal businesses, efforts should be made to secure an agreement on those bills as the top priority matter through inter-party revision consultations, and enact them in the next extraordinary session of the Diet. While I have submitted the bills in the belief that they are the best, I understand that it is up to the Diet, which is the legislative branch, to make decisions on revisions, mainly based on inter-party debates.

Mr. Kawabata has long experience as a Diet member, and I have been on intimate terms with him. He formerly served as the DPJ's Secretary General and Chairman of the Diet Affairs Committee, as well as the Minister of Education, Culture, Sports, Science and Technology. This time, he has been appointed as the Minister of Internal Affairs and Communications. He comes from Shiga Prefecture and has an engineering background, as he is a graduate of Kyoto University's Faculty of Engineering. He was an engineer at Toray and participated in union activities. He and I were colleagues in the House of Representatives for nearly 20 years. He is a man of good judgment with long experience as a Diet member. In the previous Diet, he made great contributions to the establishment of the Special Committee on Postal Reform as the House of Representatives' Chairman of the Committee on Rules and Administration.

Actually, I already spoke with him today. As the Prime Minister has issued an instruction concerning the postal reform bills, Mr. Kawabata and I agreed to work together toward the enactment of the bills. The achievement of postal reform is a task on which all cabinet members should work together as an urgent task, so the Prime Minister has issued a relevant instruction. I respect Minister Kawabata very much as a respectable Diet member with long experience. I will do my best to enact the postal reform bills quickly in cooperation with Minister Kawabata.

Q.

As the only cabinet member appointed from the People's New Party as a coalition partner, could you comment on the lineup of the Noda cabinet?

A.

When I was watching a TV program today, I learned that the Noda cabinet has the lowest average age among the coalition cabinets of the DPJ and the People's New Party, as it includes 10 first-time cabinet ministers, so this is a young and fresh cabinet. Meanwhile, Prime Minister Noda has a low-key personality, and he has declined to give a catchy tag to his cabinet, emphasizing the importance of matching words with deeds. As I often say, results are all-important for politicians. It is important that politicians achieve results for the people to see and evaluate. Regarding the post-earthquake restoration and reconstruction, unless we act and provide relief as a result, rather than merely talk, we cannot fulfill our very important political responsibility. The new cabinet is young and fresh, and the Prime Minister has said that his cabinet is jimi (humble). I, Shozaburo Jimi, also think that this cabinet is - no pun intended - jimi. We should first achieve results for the people to see and evaluate.

Q.

I understand that you will seek to enact postal reform bills in the next extraordinary Diet session. If you fail to do so, how will you take responsibility as the minister in charge?

A.

I hear that political parties and parliamentary groups have effectively established an inter-party consultation forum and vigorous consultations are ongoing, so I will watch how the consultations will proceed. I have been told by our party's secretary general that the consultations will continue while the Diet is out of session, and it would not be appropriate for me to make comments on the assumption of the failure of the consultations to work out an agreement. I am very grateful for the efforts being made by each party to enact the bills. I am not considering what should be done if the bills fail to be enacted in the next extraordinary Diet session.

Q.

I am Sonoda from The Tsushin-Bunka Shinpou.

I hear that if postal reforms bills are enacted, they could also provide a source of funds for reconstruction. Do you have any thoughts on that?

A.

If the postal reform is properly carried out and the reform gets on track, boosting the morale and business performance of Japan Post, shares can be sold under the bills in their original form. So, some people say that although there may be some time lag, it could become a source of funds.

As you know, when shares in NTT were sold at the time of the company's privatization, the funds obtained through the sale contributed to the implementation of various government policy measures. The government holds all outstanding shares in Japan Post, and has imposed a freeze on the sale of the shares. However, if the postal reform bills are enacted in their original form, the freeze on share sales will be removed. Although it may take some time, the shares will have a certain valuation if improvement is made and goals are set. As it is uncertain whether the bills will be enacted, people at Japan Post are very much worried, and voices calling for clarity have reached my ears. Some people have expressed worries that their situation will continue to hang in the balance unless action is taken quickly. In that sense, political parties and parliamentary groups should make efforts to set a clear direction although they may have their respective positions. I understand that there is not any political party that does not recognize the value or necessity of the network of post offices that has existed since the Meiji period. If we take appropriate actions, I expect that the shares will naturally have a certain valuation.

Q.

I will ask you about the implementation of support measures related to the overlapping loan problem, which is one of the three matters concerning which the Prime Minister Noda has issued instructions. Now that the application of the Guidelines of Workout for Restructuring Debt Owed by Individual Debtors has started, will you consider further support measures? Could you elaborate in that respect?

A.

I recognize that supporting individuals and companies suffering from overlapping loan problems as a result of the disaster is a very important task. As I have mentioned at Budget Committee meetings and on other occasions, this matter involves such government organizations as the FSA, the Ministry of Finance, the Ministry of Economy, Trade and Industry and the Ministry of Land, Infrastructure, Transport and Tourism. Moreover, the Cabinet Secretariat naturally plays the central role in dealing with the overlapping loan problem. So, the relevant ministries and agencies are drawing up and implementing specific support measures in accordance with the government's policy on how to deal with that problem, which was determined in June.

For its part, the FSA will support the management of the Guidelines of Workout for Restructuring Debt Owed by Individual Debtors that has been compiled by the Japanese Bankers Association. While a guideline concerning SMEs already existed, there was no guideline concerning individuals. The FSA will support the management of the new guidelines.

Regarding financial institutions, as I just mentioned, we enacted the Act on Special Measures for Strengthening Financial Functions in order to enhance financial intermediary functions in a comprehensive manner and reassure depositors. If capital is increased, debt workouts will be facilitated. While decisions concerning debt workouts are up to the managers of private financial institutions, it will become easier to forgive debts in some cases, and that is one of the purposes of the Act on Special Measures for Strengthening Financial Functions. I expect that improving and enhancing the financial environment from a very objective standpoint will have positive effects on restoration and reconstruction after the disaster. We are working hard to draw up and implement those measures, and through these measures, we will do our utmost to support the reconstruction of the disaster areas. As to the question of whether we are considering further support measures, the FSA alone may not be able to resolve this problem, concerning which the Prime Minister has issued a particular instruction, as a third supplementary budget is going to be compiled. The Ministry of Finance has jurisdiction over budgets, and basically, ministries and agencies other than the FSA have jurisdiction over policy-based finance: the Small and Medium Enterprise Agency under the Ministry of Economy, Trade and Industry is responsible for SME-related policy-based finance, and the Ministry of Land, Infrastructure, Transport and Tourism is responsible for housing-related policy-based finance. Moreover, the Cabinet Secretariat naturally has relevant functions, too, so we will cooperate with such organizations.

Other ministries face serious problems of their own, as I mentioned earlier. The Ministry of Agriculture, Forestry and Fisheries is also involved in this matter, as there is the issue of finance for farmers.

Although I did not say this at that time, the FSA suggested various ideas regarding the overlapping loan problem, since the problem is basically a financial matter. As for other ministries, the Ministry of Agriculture, Forestry and Fisheries faces problems such as the loss of farmland and fishing boats, while the Ministry of Land, Infrastructure, Transport and Tourism must tackle problems such as the loss of many houses. The Ministry of Economy, Trade and Industry faces problems related to nuclear power stations. Therefore, I instructed the FSA Commissioner at that time that the FSA should do supporting work with all its might in various fields in relation the overlapping loan problem. As the Prime Minister has issued his instructions, I will renew my instruction for the FSA staff to work hard.

Q.

You have been reappointed to the cabinet as the People's New Party is a coalition partner, and I presume that before accepting the reappointment, you exchanged opinions with party leader Kamei. Did Mr. Kamei give you any instructions regarding specific matters?

A.

As I mentioned earlier, Mr. Kamei, as the People's New Party's leader, and Prime Minister Noda, as the DPJ's leader, have signed a coalition agreement, so Mr. Kamei instructed me again to work hard toward the postal reform.

Q.

Did he issue any specific instructions regarding revision consultations?

A.

We hold weekly meetings of our party's lawmakers, and Mr. Shimoji, who doubles as the party's Secretary General and Chairman of the Diet Affairs Committee, is responsible for intra-party coordination and negotiations with other parties, so we exchange information on general matters at the weekly meetings.

Q.

Am I correct in understanding that Mr. Kamei did not issue any specific instruction?

A.

As I have repeatedly stated, Mr. Koizumi dissolved the House of Representatives for a general election five years ago under the banner of postal reform as the symbol of his neo-conservative thinking that took the form of structural reform. In the United States, that basic thinking has broken down as a result of the Lehman shock, as greedy financial industrialists, or global financial institutions that dominated Wall Street, particularly investment banks, toppled over. That is a lingering cause of the ongoing great instability of the global financial, economic fiscal situations. The wave of deregulation continued for three decades, and over a 20-year period that followed the end of the U.S.-Soviet Cold War regime, the United States emerged as the sole global superpower. Moreover, as a result of the advance of information and communication technology, financial globalization went very far. And then, there was the Greenspan era, when deregulation was promoted in the belief that governments should minimize regulation on various forms of financial engineering techniques such as leveraging. That was an era when some people expected that the prosperity of the United States would last forever. The Lehman shock of three years ago put an end to all this, as I understand it. In the United States, the Dodd-Frank Act and the Volcker Rule have been put into force, so I think that regarding finance, too, moderation, not greed, is essential. Balance and moderation are essential, if I may express my personal opinion.

The postal privatization law was a symbol of that era. I believe that all of us at the People's New Party share this view. We will not only reverse the postal privatization law but also correct the flawed thinking that underlay the postal privatization, although some people are clinging to that thinking. The change of government was the origin of this initiative. The three-party agreement was the origin. The agreement signed by the new DPJ leader and Mr. Kamei states that the spirit of the three-party agreement reached on September 9, 2009 should be respected, and the Prime Minister said today that it is necessary to revisit the original ideals, so I will work hard with that in mind.

Q.

I am Yoshida from Kinzai Institute for Financial Affairs.

Regarding the postal reform bills, I understand that the deadline for reorganization is April 1, 2012. Do you think that preparations will be completed in time despite the delay in the enactment of the bills?

A.

Although there is a deadline, a certain length of preparation period is naturally necessary, so I think that we may think flexibly in that respect.

Q.

I understand that you have positioned the facilitation of financing for SMEs as a pillar of financial administration. On the other hand, there are concerns that potential non-performing loans are piling up at financial institutions. Last time, you extended it, and toward the end of this year, the time will come when you must decide whether or not to extend it again. What is your thinking regarding that?

A.

At the moment, we do not have a definite policy as to whether or not to extend the effective period of the Act concerning Temporary Measures to Facilitate Financing for SMEs, etc. However, we need to make the decision while taking comprehensive account of the current conditions of the Japanese economy and fundraising activities by SMEs and the prospects for the next fiscal year onwards, as well as the progress in financial institutions' efforts toward facilitation of financing.

Let me mention one thing. When the Revised Act on Special Measures for Strengthening Financial Functions was unanimously passed by the House of Councillors on June 22, I directly informed the presidents of three banks in the Tohoku region that had expressed willingness to make use of the law of the passage. One of the presidents told me, “We shudder at the thought of what might have happened if the SME Financing Facilitation Act did not exist when the earthquake occurred.” Some SMEs lost factories and machinery due to the tsunami and there are many financial institutions that have provided loans to them. As I often mention, there are a total of 4.2 million SMEs, and financial institutions are required to make efforts to modify the terms of loans. Regarding finance, maturity dates are important. While requests for modification of loan terms have been rejected in some cases, around 1.7 million SMEs, some of which borrowed loans from two or more banks, have requested modification and lenders have met the request in more than 90% of those cases. When Mr. Kamei was serving as the Minister for Financial Services as my predecessor, he enacted the SME Financing Facilitation Act through great efforts, and revised the supervisory guidelines accordingly. If this law did not exist, private financial institutions would have to make judgment on a case-by-case basis. I heard first-hand from a bank president about the relief he felt at the existence of the SME Financing Facilitation Act when the tsunami occurred, and I believe that this law, which was enacted after the change of government, has introduced some judgment criteria.

Q.

I have several questions concerning the Committee on the Review of Administrative Actions regarding Incubator Bank of Japan, which has conducted debate under your initiative. First, it has been pointed out that the membership of this committee and the contents of its report have a very strong political bias. What are your thoughts on that?

A.

I do not agree with that at all. Mr. Kaizuka, who serves as counselor, is a nephew of Mr. Hideki Yukawa (a Nobel laureate) as you know. He chairs the Financial System Council and is a former dean of the University of Toyko's Faculty of Economics. He is also counselor to the Ministry of Finance's Policy Research Institute and advisor to the Bank of Japan. He is a man worthy of respect. I hear that he has attended all meetings of the review committee. While some people may say that the committee has a strong political bias, as the minister in charge, I met him only once, at the committee's first meeting, and left the matter entirely to him, so I believe that a high degree of fairness and impartiality has been maintained. As I asked him to conduct debate in a fair and impartial manner, rather than with political motives, he made assiduous efforts, including the compilation of a very persuasive report.

As for the two committee members (who were absent at the press conference to announce the report), one is Mr. Osamu Kamoike, who was a central figure at Tohoku University's Faculty of Economics. He is an Honorary Professor of Tohoku University and a Director of the Japan Society of Monetary Economics. The other (Koetsu Aizawa) member is a Director of the Society of the Economic Studies of Securities, with which I have had some involvement. However, I think that this committee has been very fair and impartial.

Q.

One of the committee members is an academician very close to the People's New Party, isn't he?

A.

People have various backgrounds. However, Mr. Kaizuka was involved in the committee and the decision was made by the consensus of all of the six committee members. I hear that questions concerning political bias were asked because those two committee members were absent at the press conference. Everything was decided by consensus. Consensus by all members leads to a very fair opinion due to the moderation process. That is my belief.

Q.

At your press conference that was held after the cabinet meeting on August 30, you said that the legal responsibility of Mr. Heizo Takenaka, who was the Minister for Financial Services at that time, may be discussed. In relation to that, when Incubator Bank of Japan failed last year, then Senior Vice Minister for Financial Services Otsuka said that although he conducted an investigation into the establishment of the bank as there were some legally questionable points, he did not find evidence of illegal acts. Could you explain the background to and the basis of your comment at the press conference on August 30 that Mr. Takenaka's legal responsibility may be discussed?

A.

The six members of the review have the status of Advisers to the FSA, which means that they have an obligation of confidentiality. They were allowed to look at documents that describe the details of the FSA's inspections, which cannot be made public. While I am aware that Mr. Otsuka expressed the opinion that you mentioned, this committee met dozens of times, conducted in-depth debate and interviewed 16 people. They also looked at documents that cannot be made public, such as the FSA's inspection documents. As a result, the committee reached that conclusion, I think. I hear that when compiling its report, the committee excluded matters that concern the obligation of confidentiality and matters related to individuals' privacy.

As I told you earlier, when I invoked the payoff measure, I clearly stated that “Former Minister for Financial Services Takenaka bears moral responsibility.” As the minister in charge, he appointed Mr. Kimura as Adviser to the FSA, and Mr. Kimura contributed to the drafting of the Takenaka plan. On the day when Mr. Kimura resigned as Adviser, he submitted a preliminary application for a banking license. Mr. Takenaka bears moral responsibility for having appointed a person like that as Adviser. In its report, the review committee concluded that “The license for the Incubator Bank of Japan was an ‘unreasonable, improper license,' and the FSA should not have granted the license.” This has made it clearer than before that Mr. Takenaka “bears moral responsibility” as I said when I invoked the payoff measure. Therefore, I believe that his civil legal responsibility may be discussed.

Q.

It is not clear what is the basis of your argument. What law did he violate?

A.

No, please listen to me carefully. This was an “unreasonable, improper license.” It did not say “illegal license.” I hear that that is the crucial point, and it was an “unreasonable, improper license,” so it did not say “illegal license.” The word “illegal” would mean violation of a specific legal provision. Properly considering this report, I think it has become even clearer that he bears moral responsibility. In any case, regarding former Minister Takenaka's civil legal responsibility, the Deposit Insurance Corporation has so far incurred losses of 100 billion yen, and the amount of losses is expected eventually to reach approximately 350 billion yen. The Deposit Insurance Corporation levies insurance premiums equivalent to 0.084% of the amount of deposits, so ordinary depositors have really suffered very large damages in this case. It is required under law that Deposit Insurance Corporation as the financial receiver strictly pursue civil and criminal responsibility. As I said earlier, I hope that Deposit Insurance Corporation will closely examine the results of the review and debate that point.

Q.

Do you mean that you hope that Deposit Insurance Corporation will demand damages compensation from Mr. Takenaka?

A.

That is a matter that should be considered by the Deposit Insurance Corporation.

Q.

As the Kan cabinet has proved to be short-lived, the public's view of the coalition of the DPJ and the People's New Party is expected to become very harsh. Looking at the lineup of the Noda cabinet, do you notice anything that distinguishes the new cabinet from the Kan cabinet or anything that suggests that the new cabinet may make successful achievements?

A.

As I have repeatedly mentioned, after the House of Councillors election was held four years ago, we formed a parliamentary group that brought together the DPJ, Shin-Ryokufukai, the People's New Party and New Party Nippon. As I was a member of the House of Councillors, I worked with members of the DPJ and Shin-Ryokufukai. Although we were in the opposition camp at that time, we have mutual trust in each other as a result of having worked together for a long time. At that time, our proposals were sure to be voted down in the House of Representatives. For political parties, it is very important to build a relationship of trust step by step. As the Prime Minister has the authority to appoint Cabinet Ministers, I will assess the cabinet based on the relationship of trust.

Q.

Do you see any difference?

A.

I have the impression that this cabinet is more full of youth and vigor than the previous one. That is because the new cabinet includes 10 first-time cabinet ministers, although there are also some people, such as Ms. Renho, who have been reappointed after spending some time outside the cabinet.

Q.

Let me make sure about one thing concerning the debate on the extension of the SME Financing Facilitation Act. Am I correct in understanding that you do not rule out the possibility of an extension?

A.

That is a matter which will naturally be debated from now on. There is one more year left. We have not decided anything yet. In any case, we will have to make a decision on that in due course. As I said earlier, I have no prejudgment. We must conduct an adequate review.

(End)