Press Conference by Kaoru Yosano, Minister of Finance and Minister for Financial Services and Economic and Fiscal Policy
April 28, 2009
[Opening Remarks by Minister Yosano]
The cabinet meeting proceeded based on the predetermined agenda.
[Questions and Answers]
The swine flu alert level was raised today, and swine flu was recognized as a new type of influenza. Could you tell us whether the Ministry of Finance is planning to take any measures, including measures to prevent the spread of swine flu to Japan?
The Ministry of Finance is responsible for conducting customs-related operations. Quarantine must be properly implemented. As the Ministry of Health, Labor and Welfare apparently faces a lack of personnel, the Ministry of Finance is ready to offer as much support as possible to deal with this problem if consulted about what to do. Cases of infection have been reported in Mexico, the United States, Canada and some parts of Europe. As efforts to cope with the outbreak in its initial stage are underway on a global scale, it is important for Japan to tackle this as a global problem, rather than as a national problem.
What impact do you expect the outbreak of swine flu will have on economic activity?
So far, we have not heard of any WHO recommendation of restrictions on immigration and emigration or on imports and exports. At the most, several companies are refraining from dispatching employees to Mexico. It is too early to predict what impact it will have on the economy.
Regarding the financial sector, Nomura Securities announced huge losses last week. The securities industry continues to suffer from the impact of the financial crisis and major banks are expected to announce huge losses. Could you tell us how you view the financial results and the business conditions of banks, financial institutions and securities companies?
I believe that securities companies and banks have sufficient capital to cover losses for the entire securities industry or financial industry. As for Nomura Securities, a substantial portion of its losses are losses related to its acquisition of parts of a failed company, rather than losses incurred as a result of the financial crisis, so there is some room for sympathy for the company. My understanding is that individual financial institutions are taking caution to build reserves for possible losses and are writing off losses on stockholdings, rather than that they have incurred huge losses in their primary businesses.
Last weekend, there was a media report that Aozara Bank and Shinsei Bank, both of which have received the injection of public funds, were moving toward a business integration? What is your view on this?
As the two banks are negotiating legal matters, the important thing is how their negotiations will be concluded. Both banks have many stakeholders, including shareholders, borrowers and depositors, so I hope that their negotiations will be concluded successfully. I would say that this merger plan is predicated on hopes that a merger would lead to rational and efficient management by reducing the number of branches. I would like to quietly watch how this case will play out, as it should be left to the parties concerned.
There has been a media report that the injection of public funds into Shinsei Bank and Aozora Bank is planned. Is it possible to inject public funds into banks that have already received public funds?
Basically, the injection of public funds requires a major reason, or a major basis of explanation, such as that it would somehow contribute to the national economy and stabilize the domestic financial system as a whole, or that it would contribute to a local economy by rehabilitating an individual bank. While I cannot say yes or no concerning this case, I believe that a final decision on the injection of public funds should be made from this broad viewpoint.
Regarding the new type of influenza, while a large amount of funds has been set aside for countermeasures, such as development of vaccine in the fiscal 2008 supplementary budget and the fiscal 2009 initial budget, is it also possible to tap into reserve funds in the future if necessary?
In a situation like this, it is important to use necessary funds when necessary. As reserves funds are set aside for unforeseen emergency expenses, it will of course be possible to tap into reserve funds, although we have not yet discussed the necessity of doing so.
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