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

(Excerpt)

(Tuesday, November 8, 2016, 10:10 am to 10:21 am)

[Questions and answers:]

Q.

The Board of Audit has pointed out that the Deposit Insurance Corporation of Japan (DICJ) has an earned surplus of more than 1.1 trillion yen. What are your thoughts on this? As both Minister for Financial Services and Minister of Finance, you perhaps have different views in your respective capacity as a fiscal official and a financial official, so please comment in that respect.

A.

I think it very regrettable that 455 instances of misappropriation amounting to 1.2189 trillion yen were pointed out. As a fiscal official, I am naturally taking every opportunity to ask ministries and agencies to properly execute their budgets and to ensure efficient execution and proper accounting procedures. This was brought up again by the Prime Minister in today’s ministerial conference, and I myself also requested cooperation. I think that the content of this latest audit report and the Diet’s audit deliberations as well as the results of the expenditure review need to be accurately reflected when compiling our fiscal 2017 budget. All of this must be done properly. However, there are special circumstances surrounding this one trillion yen. While one trillion yen appears to be quite large, vis-à-vis this one trillion yen, the Deposit Insurance Corporation’s earned surplus amounts to about 1.1 trillion yen so, excluding this amount, there has actually been a drop from last year. When the DICJ’s earned surplus is properly handled in accordance with the law, that is how it ends up. Thinking back to that time, in addition to 10 trillion yen having been used to provide full protection for deposits, the remainder from the funds provided for bank recapitalization is being steadily paid back, but there is still some that has not been received, so this account will remain until closed out. A certain amount remains, of course, about 1.59 trillion yen, but it is considered that 500 to 600 billion yen should suffice. The remaining one trillion yen will be allocated to wherever there is a deficit in some other account, so this does not mean that this amount is left over like some kind of buried treasure. The figure of one trillion yen itself may appear enormous, but I would suggest that it is better to carefully analyze the fact that it differs somewhat in content.

Q.

So is it your opinion, then, that it is better to enable this excess – well, not excess, perhaps, but money with no specific use assigned – to be used in other accounts?

A.

There are other accounts with deficits now. Money was injected back then to recapitalize the banks, with the outcome being that the banks merged rather than failed – as you know, these are city banks listed under their old names of Sumitomo, Mitsui, the Bank of Tokyo, Mitsubishi, and so on. One city bank, Hokkaido Takushoku, did fail, but all the others were absorbed by merger. In future, we must consider what to do for other accounts and what to do about the 10 trillion yen taxpayer burden of full protection for deposits.