Press Conference by Yuji Yamamoto, Minister for Financial Services

(Excerpt)

December 26, 2006

1.  Minister's Statement

I provided an explanation of the revisions to the Enforcement Ordinance of the Customer Identification Law. I explained that financial institutions will be obliged to check the ID of customers who wish to remit cash exceeding ¥100,000, and that this new regulation will be enforced as of January 4, 2007 and ATMs will no longer accept remittance of cash exceeding ¥100,000. In response, a number of ministers have stated that ID-checking procedures at teller counters already represent a severe nuisance even without the ¥100,000 cap, and therefore this new rule represents an even greater nuisance.

After the adjournment of the cabinet meeting, the first meeting of the task force to deal with the multiple debtor problem was convened, wherein the Prime Minister first gave the following instructions regarding issues to which relevant Ministers should pay special attention, in addition to issues that need to be tackled by the task force. Firstly, the Minister of Internal Affairs and Communications was instructed to concentrate on local authorities, the most readily accessible communication link with for people. The Minister of Justice was instructed to facilitate the establishment of a system of cooperation with members of the legal profession such as the Japan Legal Support Center, as well as to focus on debt consolidation. The Minister of Education, Culture, Sports, Science and Technology was instructed to work on financial and economic education at schools and for people entering the workforce. The Chairman of the National Public Safety Commission was instructed to deal with the underground economy. The Minister of Health, Labour and Welfare, the Minister of Economy, Trade and Industry and the Minister of Finance were instructed to enhance the safety net for sound borrowers. The Minister in charge of quality-of-life policies was instructed to provide general support as the person responsible for consumer administration. The Minister in charge of correcting the multiple debt problem was instructed to tackle all the aforementioned issues and engage in general coordination as the head of the task force. As such, the Ministers were instructed to perform their respective tasks. In response to the Prime Minister's instructions, I provided a supplementary explanation about the nature of the issues that should be tackled by the task force. Specifically, the Minister in charge of quality-of-life policy should work on consumer education. The Chairman of the National Public Safety Commission should get tougher in clamping down on illegal financial transactions and deal with inquiries. The Minister of Internal Affairs and Communications should ensure that local authorities serve as guides to enquirers in directing them to the appropriate organizations, etc. The Minister of Justice should tackle the underground economy and work on strengthening the Japan Legal Support Center. The Minister of Finance should assist small and medium-sized enterprises (SMEs) in achieving early business recovery and tackling said challenges. The Minister of Education, Culture, Sports, Science and Technology should enhance financial and economic education. The Minister of Health, Labour and Welfare should make efforts to enhance the safety net, such as raising the cap on small-scale emergency loans in the livelihood welfare fund loan system from ¥50,000 to ¥100,000. The Minister of Economy, Trade and Industry commented on efforts to enhance the counseling system and to assist SMEs in achieving early business recovery and to undertake said challenges again. Our approach for the future is to discuss the basic policies with a view to solving the multiple debt problem and other such matters through conferences with specialists from January 2007 onwards, formulate a program to rectify the multiple debt problem next spring based on these discussions in the form of the task force, and have said program implemented by the government and interested parties in a thorough fashion.

2.  Q&A

Q.

Yesterday, Nikko Cordial Corporation announced that its top management executives would resign to take responsibility for having engaged in inappropriate accounting procedures. At the press conference held after the Cabinet meeting the other day, you said in general terms that one way to take responsibility is to resign. What are your thoughts on the way in which the management team took responsibility?

A.

Firstly, the personnel reshuffle was determined by Nikko Cordial Corporation itself. In regards to the evaluation of the new management team, the election of management executives is a matter of business decision by each company, so our request and expectation for them is to concentrate on preventing such an incident from happening again, ensuring governance, and restoring investors' confidence as soon as possible.

Q.

Today, you will embark on a three-day trip to China for the first time. What kind of opinions do you plan to exchange with China's supervisory authorities during the trip?

A.

In this trip, reciprocal cooperation is declared as a propriety field, as the term ''finance'' was mentioned in the joint press release issued by Japan and China at the Japan-China summit meeting held last October. As a launching pad for accelerating this kind of cooperation, I will directly meet with the head of each relevant authority.

Q.

Today's press conference after the Cabinet meeting will be the last for the year. Please provide a general overview of the year and how you would rate it, having been in office for about six months.

A.

It is less than six months: three months, to be exact. I assumed office on September 26, so counting October, November and December, it is exactly three months today, the 26th. At the Cabinet meeting, the Prime Minister stated that he has been working strenuously, and I too feel the same, as this is my first experience as a Cabinet member. Most of all, the Money-Lending Business Control and Regulation Law came into effect, as did the Trust Business Law. In addition, the prospects for promoting the ''Challenge Again'' initiative have become clear. In that sense, I have been able to come all this way, thanks to everybody's cooperation. I am relieved that progress has been made without any major hiccups. I have great expectations and ambitions for the coming year, as measures have to be examined in the task force for multiple debtor problem, various customer protection issues need to be tackled, such as facilitating the implementation of the Financial Instruments and Exchange Law, and a range of measures need to be promoted to make the Japanese market secure a world-leading position.

Q.

While acknowledging that the measures to deal with the multiple debt problem will be discussed in the weeks ahead, what are your thoughts on expanding across the nation, such as establishing a buffer or an inquiry counter?

A.

As you may be aware, two elements are indispensable in the counseling framework, namely, debt consolidation and family budget management. The problem cannot be solved by either of these elements alone, and an extremely high level of expertise is required in both of them. If I am allowed to go further, it would be even better if someone plays the role of a counselor on psychological matters, to be in charge of encouragement. Expertise is required in three areas, and these tasks cannot be undertaken by a single person. Especially considering that multiple debtors are scattered all over the country, it is indispensable to develop a powerful prefectural and municipal promotion framework and a network of organizations. I understand that the Prime Minister attended the first meeting of the task force for multiple debtor problem today to give instructions to each Minister in this context, so I hope each and every Minister will make utmost efforts according to the Prime Minister's instructions.

(End)