Press Conference by the Minister for Financial Services

(Excerpt)

April 11 , 2003

Q.

I would like to ask you about the problem concerning selectability of mark-to-market accounting. A Theme Advisory Council meeting was held today by the Financial Accounting Standard Foundation, and a high-ranking official of the Financial Services Agency appeared on television yesterday and made a comment that investors may keep off the market by giving such selectability for accounting. What do you think of it?

A.

Both the Commercial Law and the Securities and Exchange Law state that an accounting standard should be fair and reasonable as a generally applicable principle. An accounting standard is an important part of the social infrastructure, and as such, it should be designed to guard many individuals having interests in business enterprises, investors, subcontractors, employees, creditors and others.

From that standpoint, what are generally demanded of a fair and reasonable accounting standard have been discussed by the Corporate Accounting Council and others. Now that we have a new institute, it is up to this institute to discuss the subject in depth. We will keep an eye on future discussions by that institute.