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

(Excerpt)

(Friday, April 26, 2013, from 8:56 am to 9:25 am)

[Questions and answers]

Q.

It has been reported that MRI International, a U.S. financial firm, is suspected of having lost 130 billion yen in funds it collected from Japanese customers. What is the truth of the matter?

A.

I know there have been such reports. The Securities and Exchange Surveillance Commission conducts inspections of individual financial instruments business operators, and this matter concerns an individual financial instruments business operator, so while I appreciate that this is a question for the Minister of State for Financial Services, I cannot comment on individual cases.

Q.

Similar to the case of MRI International is the incident last year where AIJ Investment Advisors committed investment scams of around 150 billion yen. The scale of the loss this time around is also huge, so does this not suggest that there are problems with the current legal framework concerning the Financial Instruments and Exchange Act or with inspections and supervision by financial regulators?

A.

Until very recently, the Financial Services Agency used to be nicknamed the “Financial Punishment Agency.” At the time, you yourselves also wrote that it didn’t do anything except hand out punishments, that it didn’t do any nurturing. It had that kind of aura about it. Yet now, finance of various types helps to nurture small and medium enterprises, as well as very small companies. So I think it’s difficult to strike a balance between the view that the Financial Services Agency should toughen up supervision and the view that it should be more lax and focus on nurturing. I think that the key point with this kind of discussion, and this is true with the case of MRI, as well as with Enron in the U.S. and various other cases, is that everything is more international now, so the things we need to keep an eye on have changed. I think that things have become internationalized. Money collected in Japan is not being invested here. How is it being funneled to the U.S., to the Cayman Islands, and so on? Well, anyway, this is what’s happening now.

(End)