Press Conference by the Commissioner

(Excerpt)

May 19 , 2003

Q.

According to media reports, an auditing firm reduced the carry-forward period of Resona Bank's deferred tax assets (DTAs) from five years to three years, which may have contributed to the development of Resona Bank's present financial plight. Matters concerning the carry-forward period are presently being deliberated by the Financial System Council, and it appears that this reduction was implemented even though the Council had not yet reached any conclusions. What are your basic views concerning the treatment of deferred tax assets as the supervisory agency?

A.

It is understood that accounting treatment should basically be determined according to the rules established in 1999, and each bank and its auditing firm are together responsible for accounting treatment appropriate to the bank's actual situation through deliberation. The Financial Services Agency has assembled a Working Group in the Council to address issues concerned, including the treatment of DTAs. However, the time is not yet ripe for me to make any further comments on this matter.