Press Conference by the Commissioner

(Excerpt)

9 September, 2002

Q.

The fair value regarding the price at which non-performing loans (NPLs) are purchased by the Resolution and Collection Corporation (RCC) has already been reviewed recently. Regardless of this fact, there are demands for further review. How do you perceive them?

A.

The amendment of the law on January 11, 2002 requires RCC to purchase NPLs at fair value, allows RCC to participate in open bidding and so forth. Between January and September, RCC has acquired NPLs including in the form of trust in the amount of 1.3 trillion yen or so. In the past, RCC purchased NPLs in the amount of 1 trillion yen or so between April 1999 and December 2001. As its pace of purchasing NPLs become more than four times faster in the former period in comparison with the latter, we regard RCC is properly functioning.

Q.

In your opinion, will NPLs be disposed of smoothly even if their purchase price is sustained at the current fair value?

A.

Let me elaborate on this further. In regard to NPLs, we set forth disposal targets in concrete terms and require their swift disposal accordingly. Specifically, the disposal targets are to dispose of more than 50% of NPLs in 1 year and more than 80% of NPLs in 2 years. Furthermore, RCC is placed to be utilized for the purpose of assuring the fulfillment of these targets. Within such a framework, NPLs purchased by or entrusted to RCC amounted to 1.3 trillion yen up until September actually. The purchasing pace is four times faster than in the past, so RCC is deemed to be fully functioning. It is our understanding that NPLs will swiftly be disposed of in full amount, within such a framework as a whole.