Press Conference by Kaoru Yosano, Minister of Finance and Minister for Financial Services

(Excerpt)

September 1, 2009

1. G20 Finance Ministers and Central Bank Governors Meeting

[Questions and Answers]

Q.

In relation to the G-20 meeting of finance ministers that will be held on September 4 and 5, you spoke of your duties as a cabinet minister at the previous press conference. As the meeting is approaching, could you tell us whether or not you will attend it?

A.

I consulted with my doctor. Just before the general election, I suffered dehydration, and although I thought it was my duty to attend the international meeting after the election, the doctor did not give me the unconditional go-ahead but warned me to take care of my health if I was to go abroad. Therefore, I concluded that it would be better to ask Deputy Minister Wataru Takeshita to attend the meeting on my behalf. As he has accepted my request, he is going to attend the meeting. This is not because my health is very bad, but rather it is that I am taking precautions as my doctor did not give me the unconditional go-ahead.

Q.

Regarding the G-20 meeting, the expected agenda items include international financial regulations and the establishment of a framework for international cooperation in efforts to achieve economic recovery. What do you think will be the major points of discussion and what do you expect of the meeting?

A.

This meeting will discuss many matters related to the Financial Stability Board, which is based in Basel. However, conclusions concerning those matters will be reached not at this meeting but in debates that will be held through the end of this year. For one thing, since the outbreak of the global financial crisis last year, the view that financial policy tools, including financial regulation and controls, should be strengthened is becoming dominant around the world. As Japan has significantly strengthened its regulation, it will be able to keep itself in line with other countries in any case. Therefore, Japan will naturally participate in any initiatives if other countries agree to them. Another point of discussion will be capital adequacy regulation. There is an argument that both the quality of capital and the capital adequacy ratio should be improved in order to maintain the soundness of financial institutions. Many countries agree with this argument but think that the strengthening of regulation should be discussed after the global financial system has been normalized. We have to give consideration to two points. One is whether or not the strengthening of capital adequacy regulation will lead to a credit crunch. The other is whether we can secure an international agreement that suits the circumstances of the Japanese financial sector. As conclusions concerning these matters will be reached by December, Japan also wants to actively participate in the working-level debates — I understand that the FSA (Financial Services Agency) Commissioner will visit Basel soon — that are intended to lay down common global rules.

(End)