Press Conference by the Minister for Financial Services

(Excerpt)

14 June, 2002

Q.

Yesterday, in the conference attended by leaders of the ruling parties, the leader of the New Conservative Party suggested the further postponement of the re-launch of the pay-off system, which caps the government's guarantee on individual's bank deposits, with respect to the liquidity portion. Can you please re-elaborate on this matter?

A.

We introduced the pay-off system in regard to time and savings deposits this April, and as we explained at the time, it is part of structural reform, as a matter of course. In other words, financial institutions cannot gain depositors' confidence unless they work with a sense of tension, and they should tackle the situation by giving considerable thought to how they ought to be so as to gain depositors' confidence. We have been explaining that it constitutes the structural reform of financial institutions, and the means to strengthen financial institutions in Japan. We have no intension of changing this approach. Our current position is that the approach should not be changed, and there is no need to do so.