Press Conference by Kaoru Yosano, Minister of Finance and Minister for Financial Services and Economic and Fiscal Policy
March 13, 2009
[Opening Remarks by Minister Yosano]
The cabinet meeting proceeded based on the predetermined agenda. First, I would like to make a statement in my capacity as Minister for Financial Services in relation to the decision to make capital injection into three regional banks. As stated in the written statement distributed to you, we decided to make capital injection into Hokuyo Bank, Fukuho Bank and Minami Nippon Bank based on the revised Act on Special Measures for Strengthening Financial Functions. As for the details, FSA staff will make explanations to you as necessary.
After this press conference, I will leave for London.
[Questions and Answers]
Regarding the capital injection that you announced now, could you tell us specifically how much will be injected? Despite the quota of 12 trillion yen, these three banks seem likely to be the only banks to apply for the capital injection by the end of the fiscal year. Could you tell us about your views on the idea of urging banks to apply for capital injection so as to promote future use of the capital injection scheme?
As for the amount of capital injection, Hokuyo Bank will receive the largest amount, 100 billion yen, while Fukuho Bank and Minami Nippon Bank will receive 6 billion yen and 15 billion yen, respectively. As a result, the capital adequacy ratio will come to 9.0% for Hokuyo Bank, 9.1% for Fukuho Bank and 8.4% for Minami Nippon Bank. The overall quota for capital injection is 12 trillion yen, and we will welcome an application from banks that wish to enhance their capital bases. I hope that more banks will modify their articles of incorporation in preparation for that.
By stating that preparations should be made, did you mean that some kind of economic stimulus package must be worked out before the London Summit scheduled for April 2?
I hear that the Prime Minister will give the executives of both parties instructions regarding the economic stimulus package this morning, so debate on the economic stimulus package and financial measures will deepen within the ruling parties. It may well be that the Prime Minister will leave (for London) on April 2 with a fairly formulated idea.
In relation to the banks that will receive public funds, companies are facing great difficulty in raising funds toward the end of the fiscal year. Could you tell us how you view the relationship between the injection of public funds and corporate fund-raising?
We believe that we have made a substantial amount of funds available with regard to financing for small and medium-size enterprises (SMEs) by setting quotas of 20 trillion yen for credit guarantee and 10 trillion yen for (loans) by Japan Finance Corporation. The problem is the fund-raising by companies that fail to meet the definition of SME. We will take every possible measure in this regard as well. To that end, the Bank of Japan, as well as the Ministry of Finance and the FSA (Financial Services Agency), will have to make efforts.
Regarding stock price-supporting measures, there has been a proposal for the Banks’ Shareholding Purchase Corporation to purchase ETFs (exchange-traded funds). What do you think of this proposal?
I have so far refrained from expressing my view on this matter and maintained a neutral stance. I hear that the ruling parties will probably hold in-depth debate on specific matters starting next week. I understand that the members of the parties are divided into people positively supporting that proposal and people who are somewhat negative about it.
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