Press Conference by the Minister for Financial Services

(Excerpt)

15 March, 2002

Q.

You have adopted the policy of recovering the soundness of financial institutions before the end of the ''pay-off'' system. Recently, the merger of local banks was announced. Do you think this gives a clear prospect for the entire reorganization of financial institutions? Also what is your view on the reorganization after the end of the ''pay-off'' system?

A.

First of all, as for banks, I think the structural establishment in preparation for the end of the ''pay-off'' system has been completed. As for Shinkin banks and credit cooperatives, there are several institutions that are still making efforts. In any case, we have a vision that the structural establishment will have been completed as of the beginning of April, in which only sound financial institutions that have passed the criteria are allowed to operate.

Regarding matters after the end of the ''pay-off'' system -- I think we will have to gradually clarify this point on various occasions --, the ultimate responsibility lies with the management. The important thing is that the management takes the initiative in ensuring the soundness and the profitability of their own financial institution. If they think this is not feasible, it will be indispensable that they take measures at an early stage.