Press Conference by Yuji Yamamoto, Minister for Financial Services


November 21, 2006


Last week, the Financial Services Agency (FSA), as part of addressing the matter of non-payments by non-life insurance companies, issued an order under the Insurance Business Law against 26 non-life insurance companies with respect to non-payments of car insurance etc. Being the third such action, this struck me as quite extraordinary, so I would like to hear what you have to say about the intention behind it.

I would also like to ask about financial results of banks. Their interim financial result announcements are beginning to peak, with two mega-banks, Mizuho and Tokyo-Mitsubishi UFJ, having just reported their final profits, which are record high or more than expected. Granted that they present only interim figures, but please tell us how you see these financial results. In the meantime, as methods to return profits to customers that they thus earned, some banks have come up with steps that vary from bank to bank, for example, Tokyo-Mitsubishi UFJ, which has decided to eliminate ATM use fees; I would also like to know how you see these actions as well, please.


As for the demand for reporting issued to the insurance companies, I find it regretful that they failed to do what we wanted them to do, which is to adequately examine their non-payment cases in the past so that the FSA could get a clear picture of all of the incidents. I'm hoping that executives of those non-life insurance companies will reflect on this matter sincerely and present solid action plans, such as an appropriate allocation of their management resources to deal with it.

Moving on to the issue of banks' interim financial results; while they are reported to be mostly good, the market does not appear to take them at face value or think that highly of them, judging from yesterday's stock prices on the Tokyo Stock Exchange and other factors, and I presume that most of you also entertain a view close to that. This is precisely as it has been pointed out, and the primary reason is, in my view, the contribution of some special factors, including profits from reversal to their bad loan reserve. I would like to see them strive to offer financial services catered to user needs so that they can receive consistent evaluation marks on their business results and other aspects. For the plan on removing fees for the use of ATMs located in convenience stores, I find that's very good. I have a good feeling about the prospect that such a topic making news will prompt other banks to get better profits back to their users and serve their stakeholders more appropriately in the future.


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