Press Conference by Yoshimi Watanabe,Minister for Financial Services
April 4, 2008
[Opening Remarks by Minister Watanabe]
Before today's cabinet meeting, the cabinet held a meeting to discuss economic policy management. The cabinet members assembled a package of measures aimed at enhancing Japan's growth potential that are set for early implementation. For our part, we (the Financial Services Agency) saw that the package included various measures, such as measures to ensure smooth financial conditions for small- and medium-size enterprises, to strengthen the capital bases of such enterprises, to fully communicate the contents of the supplement to the Financial Inspection Manual (Inspection Manual for Deposit-Taking Institutions) and to develop a "middle-risk, middle-return market."
(Liberal Democratic Party) Secretary-General Ibuki asked me, "You speak of the development of a middle-risk, middle-return market, but isn't there an easier-to-understand term?" I will deliberate for a while as to whether "middle-risk, middle-return" are the right words or whether we should use an easier-to-understand term.
[Questions and Answers]
I will ask you this in order to make sure. Was a cabinet decision in regards to the bill for the reform of the civil servant system?
A cabinet decision was made on (the bill for) the reform of the civil servant system today. For my part, I thanked the cabinet members concerned for the "energetic and frank discussions" in which they engaged.
This bill will now be submitted to the Diet. Even in the "divided Diet" (with the House of Representatives controlled by the ruling coalition and the House of Councilors by the opposition parties), I strongly hope that opposition party lawmakers will support a forward-looking bill like this one. With the help of their support and based on this reform plan, I would like to do my utmost to realize an administration focused on the people. First of all, it is important for the Diet to conduct deliberations on this bill and to pass it without diverting from the course of reform.
As for the reform of the civil servant system, it seems to me that the initiative of the reform has shifted from bureaucracy to politics. Although the detailed designing of the system has yet to begin, how would you like to see debate on this bill develop in the future?
Unless the bill is deliberated and passed by the Diet, we cannot take any further steps. During the deliberations, a variety of issues and problems will be pointed out and opinions will be expressed on the desirable direction for reforms. I believe it is important to hold forward-looking discussions and pass the bill.
The approach to administrative reform measures like this should not be an "all or nothing" approach. I think that the important thing to do is to make steady progress along the path to reform. I strongly request that opposition party lawmakers hold forward-looking discussions and make a forward-looking decision.
I would like to ask you about the appointment of a new governor of the Bank of Japan. It has been reported that the government may propose its own candidate for the governorship early next week. The Democratic Party of Japan (DPJ) appears for now to still be reluctant to accept a former official of the Ministry of Finance as a new governor. What do you think of the idea of appointing someone from the private sector?
As I have repeatedly told you, rather than argue over the desirable career background for a candidate, we should be debating over how Japan's monetary policy management should be conducted. There are signs that the global financial and capital markets are regaining a certain measure of stability. However, I do not think that a fundamental solution has been achieved. We should first face up to the reality confronting the global market and hold debates on approaches to said conditions and what type of framework for global cooperation will be feasible. This kind of debate should serve as the basis for our consideration of who would be the best choice.
I would like to ask you about today's cabinet meeting. I understand that until now, the civil servant system reform bill has faced objections from some cabinet members. Were any objections raised at today's cabinet meeting?
There was no objections at all. The decision was made in a calm atmosphere.
In relation to the same issue, you have just stated that the approach to the reform should not be "all or nothing." Does that mean that it is possible to amend the bill during the process of deliberation through the adoption of a DPJ proposal, depending on circumstances?
That is a matter concerning the Diet deliberation process, and it would be premature to talk about the possibility of amending the bill before its submission to the Diet. First of all, I want to have the government bill deliberated in full.
I suppose you have struggled hard to wrap up this bill as there have been objections raised within the Cabinet and within the ruling parties. What is your own assessment of the bill?
Speaking frankly, I am surprised that we have achieved as much as we have. At first, the situation was such that it was not even clear whether the experts' panel (on the civil servant system reform) would be able to submit recommendations. However, the panel fully debated the reform, spending two additional months thereon. The extra time spent deepened the debate considerable. Philosophical points in relation to the reform were fully debated as well. Consequently, our bill was formed on the basis of panel recommendations with deepened insights. While the bill may not be satisfactory in every respect and may not have received full marks, I think it has obtained a passing grade, as it establishes a firm direction for reform.
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