Press Conference by the Commissioner

(Excerpt)

April 14 , 2003

Q.

The stock prices dropped to the lowest level since the bursting of the bubble economy, and the three major economic federations reportedly demanded withdrawal of tax on gains from stock transfer among other things. Does the Financial Services Agency (FSA) have any market revitalization measure or any additional market regulating measure in mind?

A.

Since the stock prices are determined by various factors on the market, I would like to decline to comment further. At any rate, the stock prices are dependent on future values of individual corporations in the long and medium terms although it is hard to identify factors in the short term. It is crucial for the government and the Bank of Japan to make concerted effort to overcome the deflation, and they are currently working hard together for a break-through.

The prime task at the present stage of the FSA, which has the stock market under its administration, is examination of measures to revitalize the market. The FSA accordingly proposed a tax system modification and a revision of the Securities and Exchange Law to the Diet for deliberation at its current session. In March, we announced six essential measures (''Measures for Ensuring Proper Operations of Stock Markets''), and we intend to proceed further with our action for market activation. We will keep close watch over the market and the outcome of the measures I have just mentioned, and continue a wide-range study to find out effective action in its power for market revitalization.

You mentioned the demand by the three major economic federations. We have already decided on a plan for a sharp cut and a radical simplification of securities-related tax and the new system are effective now. It will be essential to execute this plan steadily.

Q.

We hear that Cerberus has already applied or is going to apply for preliminary approval of its buy-up of the Aozora Bank's stocks. How will the FSA respond to this move? We would like to hear your view since part of political circles seems to have a deep-rooted allergy to foreign capital.

A.

The application you mentioned has not been filed yet. If such an application is received, we will examine it properly according to law.

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