[Hot Picks from the Financial World]

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We deliver the hottest information of the times in this section, selected from among questions and answers given at the Minister's press conferences etc. If you wish to find out more, we invite you to visit the ''Press Conferences'' section of Financial Services Agency's website.

Q:     Do you think the authority given to Japan's SESC is extremely wide ranging? Supposing that its authority will be reviewed in the future, which specific aspects of it could be considered for review?

A:		An organization is no good if it is just written on a piece of paper. It needs to have some history and build up expertise and human resources. I think it is impossible to create a perfect organization overnight in practice. Take a close look at the handout, as it shows that the authority to establish regulations and to take administrative action rests with the Financial Services Agency (FSA). It is formally an extension of the discussions dating back to around 1991 and 1992, that there should be some kind of firewall between the body in charge of surveillance and the body in charge of taking action. I think the current organization is good, and the SESC has effectively functioned in practice with respect to the latest (Livedoor) incident.
(from the press conference following a cabinet meeting on Tuesday, January 31, 2006)

Q:     The current procedures for administrative action involve the SESC making a recommendation and the FSA taking action. Some people are demanding that the SESC be given the right to take administrative action as well. The existing framework probably has its pros and cons--what is your view on this?

A:		The system is based on the idea that it is not desirable for the coach and the umpire to be the same, so even if the administrative body that recommends administrative action and the administrative body that actually takes administrative action are different organizations, there are no obstacles whatsoever. The FSA will never leave a case unaddressed by omission if there is a recommendation by the SESC, so I think the existing system is sufficient at this point.
(from the press conference following a cabinet meeting on Monday, February 6, 2006)

Q:     The other day, the first payment order has been issued since the launch of the civil penalty system. What is your evaluation of the first payment order, and your view on what the civil penalty system should be like in the future?

A:		There are two ways of taking action, criminal and administrative. The civil penalty system is a speedy and effective means of taking action more flexibly. Also, as I just said, the civil penalty system is based on administrative action, so it is distinguished by a certain degree of speediness and flexibility.
(from the press conference following a cabinet meeting on Friday, February 10, 2006)

Q:      A round-table meeting is to be held by experts over the issues on the stock exchanges today. Can you please describe the purpose of the meeting?

A:		Needless to say, the role fulfilled by the Tokyo Stock Exchange (TSE) is extremely important for the Japanese economy and for foreign investors. This makes the TSE vital infrastructure not only for the Japanese economy but also for the international financial market. It therefore goes without saying that the reliability of the TSE's system and various rules of the TSE must be world-class. The meeting to be held by experts on these issues today is not aimed at scolding the TSE. Rather it has two objectives; the first is to make the TSE carefully listen to what has been discussed on the TSE, and the second objective is to give social support to reforms envisaged by the TSE itself.
(from the press conference following a cabinet meeting on Monday, February 6, 2006)

Q:      A Mizuho Bank employee was arrested for stealing massive volumes of personal information. What is your view on this incident?

A:		Important information on customers was leaked outside. Even worse, the leak involved a company acting as a front for a crime syndicate according to reports by the press. It was an extremely shocking incident indeed. How it happened remains unknown as the case is still under investigation, but in any case, not only Mizuho Bank but also other banks must make a commitment to manage information so as to ensure the reliability and trustworthiness of financial institutions. In any case, there is a lesson to be learnt from this problem by the FSA.
(from the press conference following a cabinet meeting on Friday, February 10, 2006)

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