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

(Excerpt)

(Tuesday, August 4, 2015, 8:43 am to 8:52 am)

[Questions and answers]

Q.

My question is about audit firms. On July 31, CEO Amano of the audit firm [Deloitte Touche] Tohmatsu resigned from his post, a move that Tohmatsu described as being for personal reasons. However, it has been reported that the former CEO had dealings with a certain listed company that went against the firm’s internal rules. With regard to audit firms, the Japanese Institute of Certified Public Accountants has launched a probe of the [Ernst & Young] ShinNihon audit firm, which audited Toshiba’s books, so it seems attention is turning to the question of whether large audit firms are conducting their audits of listed companies appropriately. Minister Aso, what kind of action are you thinking of taking toward audit firms in the future?

A.

Basically, regarding the gaining of the trust of the market, if certified public accountants or audit firms’ employees don’t do their jobs properly, the trust of the market will be lost. And trust not only in that particular company but in Japan’s market as a whole will be affected, so our basic stance is that we want them to do their jobs properly.

Q.

Do you have any specific plans at the present time?

A.

I won’t talk about specific things we’re working on right now.

Q.

I would like to ask you about bitcoin. The other day, the former CEO of an exchange that failed last year was arrested on suspicion of falsifying data in its trading system. In Japan at present there is no legislation or regulator for virtual currencies such as bitcoin. However, in June the FATF issued guidelines concerning the creation of virtual international currencies, and with the aim of blocking terrorist funding and protecting users as in this case, the Liberal Democratic Party (LDP) and the Financial Services Agency (FSA) have begun discussing regulation. The FSA looks to be a strong contender to become the regulator, but Minister, what are your views on a regulatory approach to virtual currencies?

A.

This topic of virtual currencies like bitcoin came up a lot last year, and I think this thing that happened in Shibuya was the biggest case to have occurred in Japan directly. I think it was at the G7 summit that discussions addressed the need to introduce regulations in order to prevent terrorist funding, tackle money laundering, and so on. We’ve gathered a lot of information, and I think that the actual ways the currencies are used need to be properly reflected, and I think that studies need to continue concerning an approach. To be honest, I wonder if these are actually currencies. If they’re described as currencies, they would fall under the purview of finance, but are they goods or are they currencies? It’s a tricky issue. However, if damage occurs, the police become involved, so it’s a little bit difficult.