FSA Newsletter October 2008

photo (Minister Motegi at a press conference after the inaugural cabinet meeting) photo (Minister Motegi taking over from his predecessor, Mr. Watanabe)

Minister Nakagawa at the press conference following the first cabinet meeting (September 25)

Minister Nakagawa giving instructions to FSA employees (September 25)

Table of Content


Statements, Speeches & Material

In this corner, we post statements and speeches made by the Minister, the Senior Vice Minister, the Parliamentary Secretary and FSA officials, as well as presentation material they used.

Speeches

September 22, 2008

Statement by Toshimitsu Motegi, Minister for Financial Services, on ensuring market fairness for stabilization of international financial markets

September 25, 2008

''Global Market Turmoil and Beyond -Need for Longer-Term Perspectives-'' Keynote, Address by Takafumi Sato, Commissioner, Financial Services Agency at the Euromoney Japan Capital Markets Congress 2008, Tokyo

September 18, 2008

''Financial Innovation and Global Market Turmoil ∼ Preparing for the Post-Subprime World of Finance ∼ speech by Takafumi Sato, Commissioner, Financial Services Agency at the FIA Asia Derivatives Conference, Tokyo

September 11, 2008

''FSA Action in Response to Global Market Turmoil ∼ Preparing for the Post-Subprime World of Finance ∼ speech by Takafumi Sato, Commissioner, Financial Services Agency at the IIF Asian CEO Summit, Tokyo

September 11, 2008

''Internationalization of Japan's Property Markets and the FSA's Better Market Initiative'' speech by Takafumi Sato, Commissioner, Financial Services Agency at the Real Estate Investment Forum TOKYO


Photograph Gallery

In this corner, we post photographs of the Minister, the Senior Vice Minister, the Parliamentary Secretary and FSA officials at work in meetings, conferences and other events.

photo
Former Minister Motegi and new Minister Nakagawa shake hands at the handover ceremony (September 25)
photo
Bidding farewell to departing Minister Motegi (September 25)

[International Affairs]

Minister for Financial Services Motegi visits the United States

Toshimitsu Motegi, then Minister for Financial Services, visited the United States for 4 days starting August 27. There, he met Chairman Ben Bernanke of the Federal Reserve Board (FRB), Chairman Christopher Cox of the US Securities and Exchange Commission (SEC), President Timothy Geithner of the Federal Reserve Bank of New York and Managing Director Dominique Strauss-Kahn of the International Monetary Fund (IMF).

In the string of meetings, the Minister was able to reach a common understanding that cooperation between the financial authorities in the two countries is vital in face of new developments that are emerging in the global financial market turmoil triggered by the subprime mortgage crisis in the US. Views were also exchanged on a broad range of issues, based on the perspective of strengthening the international competitiveness of Japan's financial and capital markets.

FSA expects to strengthen cooperation with financial authorities in other countries through a direct and candid exchange of views at top levels and to push for advances in its drive to strengthen market competitiveness.

photo

Meeting with Mr. Dominique Strauss-Kahn, Managing Director of the International Monetary Fund (IMF)

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Meeting with Mr. Ben Bernanke, Chairman of the Federal Reserve Board (FRB)

[Topics]

''Annual Supervisory Policies for Major Banks, etc. for Program Year 2008''
''Annual Supervisory Policies for Small- and Medium-Sized and Regional
Financial Institutions for Program Year 2008''
''Annual Supervisory Policies for Insurance Companies, etc. for Program Year
2008''
''Annual Supervisory Policies for Financial Instruments Firms, etc. for
Program Year 2008''

In fulfilling its function of supervising major banks, small- and medium-sized and regional financial institutions, insurance companies, etc., and financial instruments firms, etc., the Financial Services Agency (FSA) adopts and publishes annual supervisory policies clarifying its basic approach and key points of its supervisory role in each sector at the beginning of each program year.

For the Program Year 2008, ''Annual Supervisory Policies for Major Banks for Program Year 2008'' ''Annual Supervisory Policies for Small- and Medium-sized and Regional Financial Institutions for Program Year 2008,'' ''Annual Supervisory Policies for Insurance Companies, etc. for Program Year 2008'' and ''Annual Supervisory Policies for Financial Instruments Firms, etc. for Program Year 2008'' have been adopted and published to identify priority areas in implementing financial supervision.

There policies are summarized below.

1. Introduction

At the time of establishing the Annual Supervisory Policies for Program Year 2008, global financial markets remain tense, triggered by the U.S. subprime loan problem. Furthermore, the economy is weakening, and is exposed to further downside risks depending on movements in crude oil prices and other such factors.

Against this backdrop,

Based on these expectations, the supervisory policies for Program Year 2008 place an emphasis on the following areas and, to address these various issues, on actions based on an approach of qualitative improvement in financial inspection (Better Regulation).

2. Key Areas

3. Materializing "Better Regulation"

Improving the quality of financial regulation is important in order to make Japan's financial markets more competitive. Also, financial regulation should place a greater emphasis on voluntary efforts and innovative ideas by financial firms, in light of the current phase of Japan's financial sector where it should continue and further refine its efforts to stabilize the financial system, protect customers, and establish and maintain fair and transparent financial markets.

Under these circumstances, the FSA will continue to be engaged in the efforts to solve supervisory issues in program year 2008 based on "better regulation" which centers on the following four pillars. The agency will have all its supervisory staff appreciate the concept and materialize it by the following efforts.

For the purpose of enhancing the effectiveness of such efforts, the FSA will endeavor to improve the skills of its staff by such means as cultivating and hiring experts, and enhancing training programs.

Based on the supervisory policies mentioned above, FSA will continue to implement supervision of financial institution with both effectiveness and efficiency, while paying attention to their self-help efforts and innovative actions.

1 http://www.fsa.go.jp/policy/bmi/index.html

Requests for FY2009 Tax Reform

On September 1, the FSA submitted the "Requests for FY2009 Tax Refrom" to the Ministry of Finance and the Ministry of Internal Affairs and Communication.

This year, for the purpose of strengthening the competitiveness of Japan's financial and capital markets, we have requested tax measures required to promote:

1. Changes in investment trends (''from savings to investment''); and

2. Building of an environment to facilitate domestic and foreign investments

1. In order to promote changes in investment trends (''from savings to investment''), we requested:

(i) Creation of a "Japanese version of ISA" (tax-free accounts available for small sum, long-term investment)(Request for development of small investors through asset formation based on small-sum, continuing and long-term investments)

(ii) Introduction of tax-free investments for senior citizens(Request to offer senior citizens security in old age, in view of the fact that citizens aged 60 and over hold 60% of total financial assets in the country and nearly 70% in stocks and investment trusts, etc.With the decline in interest earnings in recent years in the low-interest financial environment, income from dividends is growing rapidly in importance in the budgets of senior citizens and can therefore be called "second pensions")

(iii) Consideration of investor convenience in preferential measures under the securities taxation system

(iv) Improvement of the defined contribution pension fund (401k) system

(v) Broader scope in aggregation of profit and loss for financial products

and others.

2. To build an environment that facilitates domestic and foreign investment,
requests have been made to review partnership investment fund taxation (PE No.1) .

A request has been submitted to enable foreign investors investing into a collective fund in Japan not to be held liable for reporting such investments in Japan.

Similar problems existed in the past in the case of bulk delegation of investment to a Japanese investment management service, which was addressed in the 2008 tax reform.


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