Press Conference by Kaoru Yosano, Minister of State for Economic and Fiscal Policy and Financial Services

(Excerpt)

July 21, 2006

Q.

This question relates to the deceitful use of bank accounts such as bank transfer fraud: the results of a survey conducted by the Financial Services Agency (FSA) and the Japanese Bankers Association revealed that the amount retained and not paid back by banks nationwide to fraud victims totaled $5.9 billion. What is your opinion on this, and what are your thoughts on actions to be taken by the FSA so that the amount will be paid back smoothly to victims?

A.

This has been a social problem for some time: individuals who remitted money to the holder of a bank account purchased from someone else for the purpose of bank transfer fraud demanded the banks to pay back the money, but the banks are reluctant to pay it back due to their fear of incurring civil liability in the future. While I understand the banks' position, I also understand the feelings of bank transfer fraud victims who want their payback request to be met quickly. We need to have extensive discussions with financial institutions--the financial institutions must hold extensive discussions with each other as well--and work closely with the law enforcement authorities, and in the meantime, top priority must be given to the relief of victims as a matter of course.

While due consideration will be given in the process to make sure that the banks which received the money will not in turn be unexpectedly victimized, the FSA, the banks and the police basically need to think about providing relief to victims.

Q.

Some people are calling for the establishment of special legislation or laws to develop rules for paying back the money. What are your thoughts on this?

A.

Legislation is meaningless unless it safeguards banks from being held liable when they pay back the money after an incident, so it will probably be an extremely tough legislative process. We will properly research and look into this.

(End)