Press Conference by the Minister for Financial Services
[Release of the ''Program for Further Financial Reform - Japan's Challenge: Moving toward a Financial Services Nation'']
December 24 , 2004
As the development of our new program has been finalized, I would like to offer you an account of that development. It is in our attempt to proceed with our financial reform emphasizing users' needs, embarking on a new stage of the reform process as the next step to financial revival, that we have developed concepts and new administrative guidelines in the form of a document entitled ''Program for Further Financial Reform - Japan's Challenge: Moving toward a Financial Services Nation.''
The development of the program was based on the following views:
1. Japan's financial system is entering a new forward-looking phase aiming at establishing a desirable financial system for the future, having now moved beyond the emergency reaction against the non-performing loans problem by implementing the ''Program for Financial Revival'' and other measures. This new phase could be described as one in which the attitude of Japan's financial administration toward the financial system changes from an emphasis on ''financial system stability'' to an emphasis on ''financial system vitality''.
2. As the use of IT in the financial industry progresses, the volume of internet transactions is increasing throughout the entire economy. Based on the changing outlook of the financial environment described above, it is necessary to create a concrete program for financial reform as part of overall structural reform, in order to contribute to sustainable economic growth, and to take accurate steps in response to both Japan's aging population with a falling birthrate, and the further globalization of the economy.
3. As a vision of a future desirable financial system, we could imagine a financial system that is superior in its convenience, price advantage, diversification, international aspect, and reliability, and in which users easily and safely can get the financial products and services they want.
4. In the future, it is expected that, through the strategic use of IT, a desirable financial system will come to be realized, bringing with it increased convenience due to the diversification of distribution channels, and improved profitability for financial institutions resulting from the reduction of office expenses and other costs. Additionally, the financial administration is required to take a leading role in enhancing convenience and efficiency through the promotion of e-government with the use of IT.
5. the financial administration must aim to establish a financial system in which the level of users' satisfaction is high, which is evaluated well internationally, and which is not led by the ''public sector,'' but by the effort of the ''private sector''.
Finally, it is expected that the means of asset management available to people will be diversified and become more efficient through such a reform, accelerating the shift from savings to investment, and the reform of money-flow will likely further progress and contribute to the vitalization of the economy as a result.
Based on the aforementioned basic views, we organized the contents of reform that we should develop in the future in terms of the following five points:
1. Institution building to enhance users' convenience drawing out private-sector vitality, and development and thorough implementation of user protection rules. (Emphasis on users' needs and thorough implementation of user protection rules)
2. Strategic use of IT for strengthening the competitiveness of financial institutions and further developing financial infrastructure.
3. Further development of a financial system which is internationally open and a financial administration with an international perspective.
4. Establishment of a financial system which contributes to the realization of vibrant regional economies. (Contribution to regional economies)
5. Establishment of a reliable financial administration that complements market discipline.
I will have our administrative staff give a more detailed account of the specifics of these points.
In carrying forward the measures described above, it is necessary to clarify the basic principles of future financial administration.
The following points are required as the basic principles of the future financial administration:
1. Thorough implementation of playing a financial administration's role as a judge that complements market discipline.
2. Establishment of a ''Code of Conduct'' for financial administration along with a full check of current regulations and repeal of unnecessary regulations.
3. Development and thorough implementation of user protection rules so that users do not suffer unexpected losses.
The FSA will draw up a work schedule as a roadmap for implementing the program and release it within this fiscal year. In order to carry out the financial reform, we are also intent on working hand in hand with the government parties in carrying forward concrete measures.
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