Press Conference by the Minister for Financial Services

(Excerpt)

October 4, 2005

Minister's Statement

The bill to amend part of the Banking Law, etc., which was a project of the Financial Services Agency (FSA), was approved at the Cabinet meeting today. As you may already know, the bill reviews the bank agency system and allows a wide range of ways to enter into the agency business, with the aim of helping to improve user convenience and the management of banks and other financial institutions. It also involves taking appropriate measures for user protection, etc. The bill is designed to develop necessary systems including relaxing the regulations on subsidiaries and regulations of business operations and taking measures to ensure the healthy operation of banks and other financial institutions.

Q & A

Q.

What kind of efforts will be made to pass the said bill to amend the Banking Law after its submission to the Diet in the coming days, including discussions and appeals?

A.

As I just said, the bill involves an important revision of the system aimed at improving user convenience and the efficiency of bank management. I will do my best to gain everyone's understanding to have the bill passed promptly, by explaining its necessity in Diet deliberations.

Q.

In the Kanebo accounting fraud scandal, three out of four arrested accountants were prosecuted yesterday. As you may be considering taking administrative action pursuant to laws concerning auditing firms and Certified Public Accountants (CPAs), please explain what kind of procedures will be taken for such action, and the outlook and timing of such action.

A.

It is extremely regrettable that CPAs, who play a crucial role in ensuring confidence in corporate financial information, have been prosecuted. The FSA will carefully observe the developments of the public trial and strictly deal with the situation in the days ahead pursuant to laws and regulations.

It goes without saying that CPAs and auditing firms should fully recognize the importance of their respective missions and duties, and make the utmost efforts to properly conduct audits so that confidence in them will not be undermined.

Q.

As the scandal arose immediately after the revision of the Certified Public Accountant Law, many members of the Liberal Democratic Party, which is part of the ruling coalition, are calling for even tougher regulations, questioning whether the revision went far enough. Will the FSA take some kind of action or have discussions in the days ahead in regards to the Certified Public Accountant Law, including its amendment?

A.

We will keep a close eye on the discussions between the members of the ruling parties in the coming days. If any new facts are revealed, we will make efforts to enhance the CPA auditing system in consideration of such facts.

(End)