Press Conference by Taro Aso, Deputy Prime Minister, Minister of Finance and Minister for Financial Services

(Excerpt)

(Thursday, January 31, 2013, from 5:52 p.m. to 6:22 p.m.)

[Questions and Answers]

Q.

I would like to ask you about the bill to amend the Act on Enterprise Turnaround Initiative Corporation of Japan (ETICJ). Under the amendment bill, the names of small and medium-size enterprises receiving support may remain undisclosed. Although support, which is financed by public funds, has until now been provided on the premise of disclosure, the names will now be allowed to remain undisclosed. Is there no problem with that arrangement? I also have a question relating to the support provided to JAL by ETICJ, which  has drawn fairly strong criticism as being unfair to rival companies. In relation to that, is there anything that should be kept in mind about the future operation of ETICJ?

A.

ETICJ will be fundamentally reorganized. With its functions enhanced, it will be reorganized to focus on invigorating regional economies, to use bureaucratic jargon. Such reorganization will make it easier to provide meticulous support. The problem is that as soon as ETICJ’s name is mentioned, banks stop providing support. As soon as rumors of a company asking for support from ETICJ begin to circulate, the flow of funds from banks stops. This is the usual story. Rumors feed rumors. That is a prime example of a harmful rumor spreading through news articles written by you reporters. The reality is that if the corporation’s name is mentioned carelessly, support from banks and other financial institutions is halted in many cases. The emergency situation like this is a major background factor.

As to the rivalry between JAL and All Nippon Airways, opinions are divided. I assume that there are many people eager to complain about various things, such as JAL’s decision to pay dividends after having its debts forgiven. When I heard about the decision, I thought that if I were a shareholder of JAL, I would definitely speak my mind. There are many people who think that after being freed from the burden of debts, JAL should have first made courtesy calls to the lenders to whom it did not make repayments. I can understand such thinking. However, this is a matter that was decided under the former government of the Democratic Party of Japan (DPJ), so I do not know how it has come about.

Q.

Let me ask you about the plan to create a comprehensive exchange. Regarding regulational improvements relating to a supervisory agency, a relevant law was amended under the DPJ government. Although the plan is included in an emergency economic package that was adopted the other day under the LDP government, there has been no apparent progress in discussions between the exchanges concerned. Do you think that further regulational improvement is necessary in order to give an additional push for progress? Also, although this is a matter of business decision, do you intend to seek to realize the plan at an early date by exerting your political leadership as the minister for financial services or as the deputy prime minister if progress is slow?

A.

I am not unfamiliar with the background to the discussion on this plan that was held in relation to the amendment of the Financial Instruments and Exchange Act. Although senior officials from both sides have made various efforts, there are cultural differences, as the plan involves not only the Tokyo Stock Exchange and the Osaka Securities Exchange but also all other exchanges, including those handling commodity transactions. I suppose you know what I mean. There are cultural differences. This is not as simple as the TSE and OSE working together; it is very complicated. There are cultural and other differences. This has been going on for the past four or five years. However, it has been difficult to sort out those differences. I think that this is a rational thing to do, so it should be done by all means. For the moment, we are not yet at a stage where we should take specific actions.

(End)