Press Conference by Yoshimi Watanabe,Minister for Financial Services
May 20, 2008
[Opening Remarks by Minister Watanabe]
Please ask me questions.
[Questions and Answers]
I will ask you about the (planned) Consumer Agency, which has apparently begun to be debated at the relevant ministries. Although I asked you about this last week, could you tell me again what you think of the Consumer Agency in relation to the laws over which the Financial Services Agency (FSA) has jurisdiction?
As I have repeatedly told you, I basically support the idea of establishing a Consumer Agency. When Minister Kishida (in charge of promoting consumer-oriented administration) approaches me about this, I will express my political opinion. The FSA has already made a major policy shift by breaking with the so-called convoy system of financial regulation. Naturally, this is a paradigm shift to the protection of investors and users. I will wait until Minister Kishida tells me what he has to say.
My next question concerns Ashikaga Bank. Last week, the FSA granted approval for a holding company for the bank, and the bank will announce its financial results today. As negotiations about investment proceed, please tell me again what you expect of the new Ashikaga Bank to be established in July.
First, I would like to wait and see how much the bank's debts exceed its assets. Since an exit route has been prepared for the bank, I strongly hope that it will provide financial services as a cutting-edge business model for regional financial institutions once it has been rehabilitated. I hope that it will become a model bank for relationship-based banking, in order that the past four years of effort (under state control) do not go to waste.
Resona Bank, which was nationalized in the same year (sic), marked the fifth anniversary of its nationalization last week, and is using this opportunity to examine what it has done over the period. Resona Bank has yet to return public funds totaling 2.3 trillion yen, and the stock price of Resona Holdings is slumping. What do you think about this situation?
Different provisions of the Deposit Insurance Act have been applied to each case: Item 1, Article 102 in the case of Resona Bank and Item 3 in the case of Ashikaga Bank. The government has injected public funds into Resona Bank to strengthen its capital base without seeking to make shareholders take responsibility. It is important for the bank to return these public funds as soon as possible. I strongly hope that Resona will do its best to work towards such a conclusion.
I will ask you about banks' financial results, although not all banks have announced their results yet. In response to a report issued by the FSF (Financial Stability Forum), I understand that the FSA has asked individual financial institutions to make appropriate disclosure regarding securitization products based on their own judgment. From the movements of stock prices following the announcement of financial results by banks, it is not clear whether the market has made a proper assessment. How do you view the results that have been disclosed up until now?
Although I will not comment on assessment by the market, I would like to point out that it is essential that banks and other financial institutions properly manage risks and make appropriate disclosure based on their own judgment. The FSA has no intention of insisting that financial institutions should not take risks. Such institutions can conduct their business successfully only if they do so. Therefore, it is essential that they take risks and manage them in an appropriate manner, disclosing the ongoing status, and I would like them to make appropriate disclosure based on their own judgment.
Is the date set for your talks with Minister Kishida?
I have not received any proposal.
Are you going to talk with him this week?
Although we always sit side by side, he has not approached me about this matter.
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