Press Conference by Yuji Yamamoto, Minister for Financial Services

(Excerpt)

November 24, 2006

Q.

The night before yesterday, some mistake was found in the figures of survey results on consumer credit group life insurance, also known as danshin. Given that these figures have been referred to in statements from the government's side in reply to questions in the Diet, please tell us your view on this matter and what actions will follow as a result.

A.

First of all, I sincerely apologize for the incorrect survey results, which, on top of that, the Financial Services Agency released in its own name. Just this morning, I instructed our executive staff to find out how the wrong figures were arrived at, why this could not be detected much earlier and, in addition, why it could not be sorted out earlier and be made public immediately, even though it is something that's concerned with the focal topic being discussed in the Diet and the Committee the day before yesterday. As soon as we learn exactly what happened, I will give details at a Committee meeting etc. and will also make sure to look into and elucidate the issue, as well as make sure to prevent further tragedy caused by danshin from falling upon anybody, anywhere, in the time ahead.

Q.

I would also like your opinion about the point raised in the proposal from the Democratic Party of Japan for revising the bill to amend the Money-Lending Business Control and Regulation Law etc., which proposal argues for creating provisions to exempt not-for-profit organizations including NPO banks.

A.

I know that NPOs are indeed working hard and I have also heard real stories of people, as examined on a case-by-case basis, who, through painstaking efforts or thanks solely to funds provided by NPOs, were able to become financially independent or to scrabble from extreme mental or material hardships. In that sense, I understand very well the intention behind your question or consideration put into the proposed revision. However, NPOs being NPOs, they have a unique characteristic of being quite dependent on who operate them, which is fine as long as the same people work at the helm but, as is occasionally seen in actual cases, might be abused or otherwise be taken advantage of. From this standpoint, I think that careful consideration must be given in the light of, among other things, augmenting the quality of moneylenders, which is one of the challenges that we face now, so that the solid base asset requirement or entry restriction should not be slackened.

Q.

On the subject of interim financial results of major banks, in which record-high profits are posted, please tell us whether or not you now consider them to be in a full-fledged state.

A.

With major banks alone earning more than 1 trillion yen in profit from their core business, it does make me feel that they are finally entering into times of offense from those of defense. That said, examining them case by case, I get a bit suspicious if they are doing as well as I wanted them to in their core business, and I also think that the special factor concerning reversal to the reserve is contributing to their results overall. Is everything going well and could they, in a state similar to being fresh out of hospital, go straight to the National Stadium and compete in the 100 meters? - I doubt it. Considering how they are now, they are still at the stage of recuperating at home after leaving the hospital; even though they can do as much as taking a walk, I still cannot feel free of worries about whether they are fit enough to participate in a competition.

Q.

In connection with financial results of banks, I believe that Ashikaga Bank is outperforming what was initially written on its management plan. Please give us your thought on this and also your comment on its effect on the assuming institution selection in the future, if any.

A.

Thanks to its management efforts having born abundant fruit, my impression is that the bank is also trying hard, much harder than at the beginning, to serve the regional economy, and I value the high-caliber competence that the bank's current team of executive office staff have proven to have. On that account, I strongly wish that they would keep it up. I would also like whichever party will assume the bank to make further management efforts and strive to improve profits etc., as I'm hoping for the earliest possible growth of the bank achieved mutually and jointly with the regional economy.

(End)