Press Conference by Tatsuya Ito, Minister for Financial Services

(Excerpt)

October 25, 2005

Q.

Regarding the Meiji Yasuda Life Insurance incident, the company released the results of its internal investigation last Friday and revealed that over 1,000 cases of non-payment had occurred. How would the minister recognize this result formally? Or, please comment on planned future countermeasures.

A.

I am aware that the internal investigation committee of Meiji Yasuda Life Insurance released the findings of its investigation last week, as you just stated. However, this is a matter that concerns a specific insurance company. For this reason, I would rather not make any comment on this point.

As we mentioned last week, we intend to study proper administrative response as called for, based on the facts that were discovered through the recent on-site inspection and other facts that came to our attention in the report that was submitted in response to the findings of the inspection.

I also believe that it would be extremely important for Meiji Yasuda Life Insurance to firmly establish a system of internal controls, including a system of controls over insurance payments, under its corporate leadership that is capable of executing proper managerial controls.

Q.

Yesterday, a company named Rakuten Securities, Inc. experienced system troubles for the fifth time in recent months. The disruption may be attributed to a surge in the volume of on-line trading. It seems that other security companies are also experiencing system troubles lately. I would like to ask about the status of supervision by the FSA, and what actions the agency has taken or is capable of taking.

A.

If I may answer your question in general terms, all securities companies that do business exclusively on line have experienced system troubles of one kind or another, judging from the reports submitted to the FSA by these companies, although the nature and magnitude of such troubles may vary from one company to another. In the majority of these cases, their systems were restored immediately after the troubles occurred. Nonetheless, it is important that each of these companies thoroughly and properly investigate the causes of their system troubles and adopt measures to prevent recurrence of the troubles in light of the fact that a trouble is occurring at one securities company or another essentially every month while the volume of trading through these online securities companies is growing rapidly. It is important for FSA to follow up measures of each company in an appropriate manner.

Q.

There has been a report that the Certified Public Accountants and Auditing Oversight Board reached a decision to conduct on-site inspections of the four largest auditing corporations as early as this fiscal year. Is there any validity to this report?

A.

I am aware of the fact that there has been a report of the nature that you described. However, I would like to refrain from making any comments on behalf of the FSA regarding the question of what action the Certified Public Accountants and Auditing Oversight Board might pursue.

I trust that the Certified Public Accountants and Auditing Oversight Board will take appropriate action by taking into consideration the current situation surrounding financial audits.

Q.

The chairman of the FRB is being replaced. Do you have hope regarding the new chairman?

A.

I have been informed that Mr. Bernanke, who is the Chairman of the President's Council of Economic Advisers, is an individual who is highly accomplished and knowledgeable in the economic and financial fields. Before he can take the office of the Fed Chairman, however, he will need to go through an approval process. We would like to keep a close eye on the approval process. The Japan-US relationship is a very important one. We hope to continue to construct close ties with the FRB when the new chairman takes office.

(End)