Press Conference by Yuji Yamamoto, Minister for Financial Services


November 2, 2006

1.  Minister's Statement

I will speak about the solicitation of an acquiring party for Ashikaga Bank. After embarking on a detailed inquiry into the issue of Ashikaga bank acquisition on September 1, the Financial Services Agency organized a working group for choosing an acquiring party for Ashikaga Bank, which has met on three occasions thus far. During this process, we invited the governor of Tochigi Prefecture to let us know the community's views and requests and also referred to views presented by working group members to consider basic terms to require of an acquiring party, in preparation for announcing a public bidding. Having done so, today we are pleased to announce the public bidding requirements to solicit parties who wish to acquire Ashikaga Bank. We are hoping to see many eager applicants who adequately meet the basic terms required of acquiring parties enter their bids. The Financial Services Agency (FSA) has every intention of working hard on selecting an appropriate acquiring party so that Ashikaga Bank may, after being acquired by another party, continue to secure trust from users and exert its financial intermediation functions in a sustainable fashion in the community in and around Tochigi Prefecture, as it has in the past. The specifics of the public bidding requirements will be explained by our executive bureau immediately after this announcement, starting at 11:00, so please attend so as to obtain further information.

2.  Q&A


It was revealed the other day that there have been a series of non-payments by major non-life insurance companies in the third-sector product area. Given that, I believe, the FSA has made efforts in the form of administrative guidance etc., which it has undertaken for the furtherance of user protection, I would like to hear what you think about this succession of incidents, though admittedly they concern specific companies. As for Ashikaga Bank, which is now poised to make a new step towards revival since its nationalization three years ago, please share with us your opinion or, rather, feelings about the development that has led up to what is now about to take place.


About your first question on the non-payments, they occurred in the third-sector product area covering, above all, healthcare and caregiving, which can be said to constitute a institutionalized security blanket in the society in which we live. In this sense, the impact of missed payments is indeed quite significant. Let me further elaborate on this point. I believe that people expect more from insurance policies when it comes to something that concerns them personally or their family, and even more so when they hit close to home. In that sense, I intend to strongly demand that the impact of such missed payments should be rectified. I will pay particular attention to the question as to whether or not the issue can be viewed only in terms of governability of product development and the complicated forms of riders in the context of the Financial Big Bang. In other words, can the issue be reduced to a simple lack of explanation or to the product complexity, given the distinctive nature of diseases and old age, which does not apply to incidences of traffic accidents or fires etc., in that they are sure to come upon all of us? I am hoping to cover the whole horizon in examining this issue, also considering, in particular, the impact of competition against foreign insurance companies within this issue.

About your second question, the issue of Ashikaga Bank can aptly be defined as one event that has symbolized unease in the financial system. As the bank was temporarily nationalized in the end, not only mega-banks but also regional and local banks and local financial institutions are all quite eager to follow its development to come. In this sense, its fresh start is likely going to be a milestone that provides implications for future regional economies in Japan, and therefore there shall be no mistakes or errors. Things like stable sustainability and intermediation functions must be ensured in the process and, accordingly, we would like to receive many applications from prospective candidates that hopefully have a good understanding of the basic public bidding requirements announced today, so that public spending burdens can be minimized through thriving competition.


On the subject of Ashikaga Bank, some in the region apparently do not find the idea of have the bank being acquired by a foreign affiliate or a fund, etc. desirable. Could you please tell us if the terms to be later announced from your executive bureau staff contain anything that takes such a view into account, and also give us your thought, if any, about applications from foreign affiliates or funds, or others equivalent to them?


We have heard requests from the prefectural governor and other stakeholders in the region. We also received opinions from Diet members elected in the region and other Diet members concerned with the issue. None of them, however, raised any such particular point about foreign affiliates or funds. I have no intention of arguing for its appropriateness or suitability. Rather I would like to consider each of them individually, in an even-handed fashion, as a prospective acquiring party that is committed to meeting the three requirements previously mentioned. A speculation of this sort probably stems from the fact that there are a wide variety of views of which I am aware. Some think that only a regionally-based financial institution can serve intermediation functions, while others consider it impossible for any such revival to be achieved without a broadened perspective. I, for one, believe that the main point should be placed on whether, and how surely, a candidate can meet the three requirements, as judged from the sincerity of its attitude towards fulfilling them, regardless of whether it is foreign-affiliated or Japanese-run.


Site Map

top of page