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

(Wednesday, September 3, 2014, 12:59 pm to 1:22 pm)

Questions and answers:

Q.

Today the Cabinet was reshuffled, and looking back on your time in office since December the year before last, please give us your assessment of the Abe Government’s economic policies, or “Abenomics,” tell us if there was anything that left an impression on you during this period, and so on.

A.

(Concerning the Financial Services Agency (FSA)) The number of NISAs, which stands for Nippon Individual Savings Accounts has reached around 6.5 million, and I think that this has had quite an impact. We were also asked to produce Japan’s Stewardship Code, and with the aim of ensuring that fiduciary responsibilities to investors are exercised, we did so at the end of February this year. 160 organizations, including the GPIF, have already expressed their acceptance of the Code. There have also been policies in a variety of other more areas, such as crowd funding, and I think that these are also gradually starting to produce results. The first and second arrows have delivered reasonable results, and if the third arrow proves as successful, then starting with the Stewardship Code, retained earnings at companies, money that is stashed away, will, if deflation turns into inflation, lose its value. So unless it can be directed outside into investment and so on, I don’t think companies will be able to demonstrate vitality. I think the third arrow depends on this, and I think that corporate executives have a lot of power here, so I think that we are entering the most important phase now.

Q.

You just mentioned this, but in the near future the government is going to be facing various policy challenges, such as making a decision on whether to increase the consumption tax in the autumn, but given that it is possible that you will remain in your post, could you tell me once again, given this possibility, how you will be tackling these future policy challenges?

A.

(Concerning the FSA) We will probably have to put together a corporate governance code and expand the NISA scheme. Around 860 trillion yen of personal financial assets is in the form of cash or deposits, and whichever way you look at it, this is an abnormally high proportion, but something that can divert this into investment, an atmosphere in which money goes into stocks, still hasn’t emerged. So we’ve introduced NISAs, which have been surprisingly effective, so I’d like to make NISAs more popular and to expand the scheme. Unless banks lend the money deposited with them, they cannot stay in business. But they cannot be said to have a broad outlook. Provincial regions contain various seeds, but the banks don’t seem to look for companies in their regions that will borrow from them. Even if there are inventions or components that could be patented, they don’t ask the people that created them what they can be used for and what kinds of users there are, in what kinds of places. Various options, in various forms, such as crowd funding, are open, and there are still many other potential alternatives, too. So we need people to play the role of so-called, middlemen, people with the ability to discern. In Asian countries, including the ASEAN, expectations concerning finance are probably going to increase further from now on, so in that sense, including the response to that, in a wide range of areas, there are elements where it has become impossible to identify the boundary between what is domestic and what is international. I don’t think there are enough human resources, enough people in those areas, so I think that unless regional banks fulfill their regional role, it will become impossible to respond to that. If the Japanese domestic population is going to decline, it’s natural to look overseas to make up for that, so I think that they have to do things like that.