Provisional translation

Press Conference by Yoshimi Watanabe,Minister for Financial Services

(Excerpt)

May 27, 2008

[Opening Remarks by Minister Watanabe]

Good morning. Please ask me questions.

[Questions and Answers]

Q.

Representing the press corps, I will ask you two questions. The first question concerns the (planned) Consumer Agency. I understand that for the first time, you exchanged opinions with Minister Kishida (in charge of promoting consumer-oriented administration) yesterday about the plan to establish the Consumer Agency. Could you tell us what proposal Minister Kishida presented to you and how did you respond? Also, how do you intend to deal with this matter?

A.

In principle, I support the plan to establish the Consumer Agency, as I have been saying all along. It was I that recommended to Minister Kishida the idea of establishing such an agency immediately after he took office. I told him that this plan should be realized by all means. It is one of the Financial Services Agency (FSA) 's missions to protect consumers, investors and users. If we are to coordinate this mission and the plan to establish the Consumer Agency, transferring the FSA's functions piece by piece to the Consumer Agency would not work. So I suggested that the FSA as a whole be transferred to the Consumer Agency. Minister Kishida dismissed this suggestion as unacceptable, so we agreed to explore how best to promote cooperation between the FSA and the Consumer Agency. The point of our talks yesterday was that we should leave the details concerning such cooperation to civil servants responsible for this matter.

Q.

The second question concerns personnel appointments subject to Diet approval. Although I understand that the government will present its nominees for several posts today, it is expected to refrain from proposing a nominee for the post of deputy governor the Bank of Japan in the current Diet session. What do you think of the prolonged vacancy in this post and the government's inability to make necessary appointments?

A.

The government has not yet presented any nominees for personnel appointments subject to Diet approval. Also, I do not believe that it has decided against proposing a nominee for the BOJ deputy governorship. I will talk about this matter after the government has presented the nominees.

Q.

As for the Consumer Agency, you said that the FSA will explore ways to cooperate with the Consumer Agency. Does that mean you are not giving particular consideration to the idea of transferring the FSA's jurisdiction over laws?

A.

Rather than discussing details such as the jurisdiction over individual laws, we, as politicians, agreed to explore how best to promote cooperation.

Q.

I have a related question. I think that integrating the authorities concerning consumer-oriented administration is a major objective of the plan to establish the Consumer Agency. Do you think that such integration is imperative with regard to financial administration and that dividing the authorities piece by piece is undesirable?

A.

The protection of investors and users is based on the same philosophy as the protection of consumers. In relation to the financial market, we use the term "consumer sovereignty," which means that consumers vote with their money. If consumer sovereignty were functioning properly, the interest rate system would not be distorted as it is in Japan. The interest rate system in Japan has been greatly distorted, as I have repeatedly said. The range of options available for consumers is distorted under this system. Therefore, we must seek to ensure the protection of consumers and consider how to enable consumers to receive better financial services at lower cost. We must consider the protection of consumers and the provision of better financial services as a single package. Exploring better cooperation (between the FSA and the Consumer Agency) means pursuing these two things at the same time.

Q.

May I understand that Minister Kishida has agreed that an organizational transfer is unnecessary in principle?

A.

If we start by discussing specifics such as organizational matters and laws, the focus will be fixed on trivial issues. What politicians need to do is to discuss matters of philosophy and ideals, and our agreement yesterday concerned exactly such matters.

Q.

I will ask you about the reform of the civil servant system. As negotiations between the ruling and opposition parties about the bill for this reform have entered the final stretch, what do you think the prospects are for the amendment? What is your gut feeling?

A.

The negotiations will reach the climax today. Since the ruling and opposition parties are very actively negotiating to reach an agreement, I would like to refrain from commenting on this matter. Anyway, I strongly hope that an agreement will be reached.

Once we start fussing about details, we will get trapped in an endless loop. The ruling Liberal Democratic Party and the opposition Democratic Party of Japan are aiming to go roughly in the same direction. If they nonetheless fail to reach an agreement, that would only delight people eager to keep the status quo. We are facing the choice between sticking with bureaucratic initiative and reverting to political initiative, so I strongly hope that the two sides will overcome their differences over details and reach an agreement.

(End)