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

(Excerpt)

(Friday, September 13, 2013, from 11:12am to 11:42am)

[Questions and answers]

Q.

The financial monitoring policy for the new program year, which was published last week, said that inspection methods, mainly those for large financial institutions, were going to be changed. Why are the methods being changed now and through the inspections what role do you expect financial institutions to play?

A.

Financial institutions talk a lot these days about things like financial health and compliance, and I think that the supervision and inspections conducted up until now are, on the whole, ensuring compliance. But looking at the global financial situation now, big changes are occurring, and if the financial system gets scattered all over the place, if it becomes impossible to talk about interbanking, if things like that happen, there will be chaos. This has also been discussed at the G7 and G20, and these changes are a means of enabling situations like this to be properly addressed. Another point is that to overcome deflation, gaining the effort and support of financial institutions is a big issue. In fact, it’s the key issue as we are committed to no more deflation and an inflation target of 2%. The monitoring, i.e. fact finding, and inspections that have been conducted until now have led to the Financial Services Agency, FSA, being dubbed the “Financial Punishment Agency,” which is not a very nice nickname, so to properly address issues like this, at the very least there needed to be a fundamental overhaul aimed at turning the FSA into a “Financial Nurturing Agency.” So the background to our announcement of the basic monitoring policy is that we felt that at the very least we needed to think a little about its content in terms of that kind of direction.

(End)

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