Press Conference by the Minister for Financial Services

(Excerpt)

September 19 , 2003

On August 29, we received Business Improvement Plans from 15 capital injected banks to which we issued Business Improvement Administrative Orders on August 1. Since then, the banks had continued to revise their respective Business Revitalization Plans. As the Financial Services Agency (FSA) has completed examining Plans, we will announce new Business Revitalization Plans of 15 banks this evening, which incorporate their Business Improvement Plans. The staff of the FSA will explain the details later.

Q.

How do you evaluate Business Revitalization Plans incorporating the Business Improvement Plans released today? Please point out their shortcomings, if any.

A.

I recognize that the banks seriously have developed their Plans, from their respective positions. The next step, to materialize the Plan, is extremely crucial. While the situation surrounding the banks is extremely severe, I strongly hope the bold challenges by the banks.

Q.

Regarding the Business Improvement Plans, you mentioned about their serious will to implement their plans. However, some banks may need to realize their Plan with extremely high hurdles, in order to repay public funds in excess of 1 trillion yen by generating profits and accumulating surplus funds for debt extinguishment. Would you explain how you felt their serious decisions to realize such Plans?

A.

As the banks are making various efforts in accordance with their individual circumstances, I cannot comment on individual restructuring plans or new business models. I just want to mention that there are signs that each bank has made various efforts in terms of revenue, costs, and medium- and long-term management innovation.

Q.

What kind of economic, fiscal and financial policies should be implemented in the future?

A.

Basically, the macroeconomic scenarios have been definitely stated in ''Basic Policies for Economic and Fiscal Policy Management and Structural Reform'' and ''Structural Reform and Medium-Term Economic and Fiscal Perspectives'', etc. For banking administration, we have developed a solid framework called the ''Program for Financial Revival'', and then its thorough implementation will be the basic requirement for realizing the above scenarios.

In addition, the next step would be to picture in details the frame of major reforms, such as the reform package of three fiscal issues between the central government and local ones and the comprehensive reform toward privatization of postal services.