Press Conference by Kaoru Yosano, Minister of Finance and Minister for Financial Services and Economic and Fiscal Policy
May 1, 2009
The cabinet meeting proceeded based on the predetermined agenda, so I do not have anything particular to report to you. Also, the second meeting on the new type of influenza was held, and a new government policy for dealing with it was decided.
[Questions and Answers]
Regarding the new type of influenza that you mentioned, if a case of infection is confirmed in Japan, restrictions are expected to be placed on various activities. What impact do you expect the new type of influenza would have on the economy?
When we face a situation like this, we should not overreact to it or underestimate it. All parties concerned should act objectively based on scientific evidence.
The Ministry of Finance and the FSA (Financial Services Agency) should take all available measures, and the government as a whole should make efforts to dispel public concerns.
You have been voicing worries about the management crisis of major U.S. companies. Early this morning, Chrysler, one of the Big Three automakers, filed for Chapter 11 (of the U.S. Federal Bankruptcy Act). What impact do you expect this will have on Japanese companies and the Japanese economy?
While the fate of Chrysler ended up like that, the U.S. government is hoping to complete bankruptcy procedures quickly, and both the U.S. and Canadian governments will provide adequate financial support. Therefore, I hope that Chrysler, which is a representative American company, will be restored to health as soon as possible.
Japanese parts manufacturers are supplying products to Chrysler. Since about a week ago, I have been consulting with Mr. Nikai, the Minister of Economy, Trade and Industry, about various possible scenarios. According to a study conducted by the Ministry of Economy, Trade and Industry, although parts manufacturers will of course be affected, the impact can be minimized as some preparations have already been made. If anything goes wrong, the Ministry of Finance and the FSA will do everything possible to deal with the situation in consultation with the Ministry of Economy, Trade and Industry.
In relation to the new type of influenza, starting tomorrow, you will attend an international meeting in Indonesia of ministers from countries in Asia, a region which previously suffered economic damage from SARS (severe acute respiratory syndrome). Although this is still an early stage, is it possible that Asian countries will confirm a consensus or express readiness for cooperation?
This is not an issue that concerns an individual country; there is the risk of a global pandemic or an epidemic in Asia. We should regard this not merely as a national issue of Japan but as a regional issue. We also need to consider what Japan can do not only for itself but also for the international community or Asia in terms of what medical knowledge, pharmaceutical products and vaccine we can provide. I expect that this will be naturally discussed at the general assembly meeting of the Asian Development Bank, and Japan believes that the need for international cooperation should be recognized.
Sumitomo Mitsui Financial Group and Citigroup of the United States have reached a basic agreement on the sale of Nikko Cordial Securities, and they are expected to formally announce it soon. This will apparently be the first time that a securities company of such a large size comes under the wing of a bank. Could you tell us how you view this deal and the integration of the banking and securities industries?
As we have been tearing down the barrier between the banking and securities industries for the past 10 years, I do not think that it is unusual for a bank to bring a securities company under its wing. I am watching to see what kind of agreement will be announced.
Hartford Life Insurance of the United States has announced that it will stop soliciting new policyholders in Japan and the United States. What do you think of the impact that the economic crisis is gradually starting to have on the insurance industry?
I have not received a report concerning that, so I cannot make any comment. Generally speaking, it is easily conceivable that the economic downturn is affecting the insurance industry, or that the financial crisis is affecting insurance companies, but I have not received a report concerning this particular case.
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