Press Conference by the Minister for Financial Services

(Excerpt)

January 22 , 2003

As the first meeting of the Task Force on Financial Issues just finished, I would like to give you a rundown on it.

Six members gathered at the meeting, where we first confirmed the positioning of the Task Force on Financial Issues and talked about the procedures. Then, as it was the first meeting today, we called on the Task Force on Financial Issues to check the content of the Program for Financial Revival once again and examine it broadly.

The first objective of the Task Force is to monitor the status of non-performing loans (NPLs) and provide advice broadly to yield results in order to fulfill our goal, that is, to terminate the NPL problem by the end of FY2004. The second objective is to give proper advice to Special Support Financial Institutions, if any, in regard to their management.

In any case, we called on them to give intelligent input to me, the Commissioner of the Financial Services Agency (FSA) and the FSA, and stated that we intend to absorb and reflect their input in the Government.

In addition to this, we explained the status of the recent financial results of banks in administrative terms.

The members stated they appreciated the fact that the banks recently have started to act very quickly. On the other hand, some pointed out that their actions may require close examination on an individual basis.

At the closing, I stated that we must work out how to evaluate various trends in the industry in the future, towards the financial results for the term ending in March 2003, and how to address the issues associated with strengthening the governance of the management of financial institutions. Further, I ended up with saying that we may need to forge ahead with discussions a little bit intensively in the first two or three meetings in a comprehensive manner, in consideration of matters that need to be dealt with step by step based on the work schedule for the Program for Financial Revival.

Q.

Various working groups established in the Financial System Council are being launched one after the other. Did any discussion take place as to how you should liaise with them in an organic fashion, or how to get the work done?

A.

Basically, in the Financial System Council, the framework requires them to compile a report and make recommendations on an individual basis, as they are working groups of the Council. Today's Task Force is not a formal entity as such, in that it is a place where consultants to the FSA will be giving us intelligent input. In that context, liaison may not be necessary due to its nature, but as a matter of course, they will have the same awareness of problems with the aim to reinforce the financial system, and they will freely engage in discussions on essential themes according to need.

Q.

In relation to the evaluation of the trends in banks which you just mentioned, you stated at the Diet today that the financial sector is finally undergoing change. Is this your view naturally?

A.

Basically, the members today pointed out that changes that were not foreseeable six months ago are now taking place, and I think so, too. We should welcome the extremely wide range of challenges that are being made. At the same time, however, while various plans are being announced, their complete pictures are not so clear. Therefore, we would like to determine whether they are strategic, sound and sincere in the future, as a matter of course.