Press Conference by Shozaburo Jimi, Minister for Financial Services

(Excerpt)

(Friday, March 16, 2012, from 7:51 a.m. to 8:10 a.m.)

[Opening Remarks by Minister Jimi]

Today, I do not have anything particular to announce.

[Questions & Answers]

Q.

In relation to the case of AIJ Investment Advisors, a survey targeting all investment advisory companies of the kind that caused this problem was conducted. The answers to the first-round survey were submitted by March 14. Could you tell me by when the results of the first-round survey will be tallied and which parts of the results you are considering publishing?

A.

As you know, the Financial Services Agency (FSA) issued an order for the submission of reports for this survey on February 29. By the submission deadline of March 14, all companies managing companies' assets based on discretionary investment contracts - 265 companies, to be precise - submitted reports.

The FSA will closely examine the submitted reports and instruct the companies to submit supplementary reports or make corrections as necessary and will then narrow them down to a list of companies subject to a second-round survey as soon as possible and conduct the survey, which will be more in-depth.

As for the first-round survey, I would like to publish the key points of the results as soon as possible. However, I hear that the volume of the submitted reports is enormous. From now on, the FSA staff will work hard to tally the results.

Q.

Yesterday and the day before that, banking associations held press conferences. At those conferences, opposition was expressed to the idea of strengthening regulation as a way to prevent the recurrence of cases like the AIJ incident. How do you feel about that? Also, do you think that regulation should be strengthened despite the opposition?

I have one more question. There are growing concerns among the people over the possibility that there could be more companies engaging in wrongdoing similar to that committed by AIJ Investment Advisors. Do you think that more such companies will be found, and is the FSA preparing to take action if more such companies are found?

A.

From newspaper articles, I know that various comments have been made by senior officials of the banking industry, including the chairman of the Japanese Bankers Association.

Regarding this issue, the FSA is still conducting its survey, with the first-round survey just completed. The cause of the AIJ case is also still being investigated, so we will take measures to prevent the recurrence of the AIJ case after identifying the cause based on the investigation results. As the head of an administrative agency, I must ensure that administrative work is conducted appropriately in light of laws and evidence in principle.

At the same time, we must also ease the people's grave concerns, and yet I believe that essentially, the conduct of administrative work must follow appropriate procedures based on laws. As the investigation results have not yet become available, it would be too early to make comments.

Let me speak in general terms. Today, I read a newspaper article - although I don't know whether it is accurate or not - about a financial industry leader, the chairman of some organization or other, who expressed anger and stated that if an investment management company were to deliberately commit wrongdoing like this, preventing it would be impossible. However, business people should naturally not only observe laws but also maintain moral integrity, or I should say business ethics. More than observing laws, principles such as never cheating other people or telling lies have formed the philosophical basis of the remarkable development of modern capitalism, so we should act in an appropriate manner in that respect, although the idea that earning money is everything was evident in various incidents that took place around the time of the Lehman shock in the United States in particular. That's how I personally feel about this issue.

In any case, as the head of an administrative agency, I will first examine the cause properly and then take appropriate measures to prevent the recurrence and protect investors.

Q.

Regarding the second question, are you preparing to take action when more cases like AIJ Investment Advisors are found, or do you think that there is no possibility of more cases being found?

A.

We immediately conducted a survey targeting all relevant companies, which total 265. When I announced the administrative action on February 24, I said the FSA would conduct the survey. Therefore, the FSA will take every possible measure without fearing criticism and without ruling out any option.

I believe that in order to regain the people's trust in finance, it is very important that I, as the person responsible for financial administration, will do my part without ruling out any option while sincerely accepting criticism, although the investigation results are still unknown.

(End)