Press Conference by Shizuka Kamei, Minister for Financial Services

(Excerpt)

(Friday, October 23, 2009, from 11:48 a.m. to 12:00 p.m.)

[Opening Remarks by Minister Kamei]

Although I do not have anything particular to report to you about today's cabinet meeting, emergency employment support measures were adopted at a meeting of the Emergency Task Force on Employment Support that was held later. For my part, from the perspective of maintaining jobs in the economy, I requested the cooperation of other ministers in quickly enacting and putting into force the bill to deal with curbs on new loans and the forcible collection of outstanding loans, which we are preparing to submit, as the end of the year (when many SME's usually demand credit) is approaching.

[Questions and Answers]

Q.

The Ministry of Economy, Trade and Industry (METI) revealed a plan to introduce a new credit guarantee scheme in relation to the bill dealing with curbs on new loans. Do you think that this scheme is close to what you had in mind?

A.

The METI plays a significant role in implementing measures to support SMEs and is the main government organization that is responsible for overseeing SME policies. Therefore, since the beginning, I have maintained close communications with the Minister (Naoshima): sometimes I visited his office, and communications have been constantly maintained at the senior vice ministerial level, too. The METI has also sent its parliamentary secretary to join our study group on a permanent basis, so the METI has coordinated its actions with ours. Therefore, I believe that the METI scheme is very good.

Q.

Regarding the METI's credit guarantee scheme, which guarantees 40% of the loan amount, do you think that the 40% guarantee is reasonable? Also, what do you think of the risk that the tax payers might shoulder the financial burden of the scheme in the future?

A.

Your newspaper is always writing the same old story. I would like your newspaper to consider this matter seriously. Then, you will know what measures will be helpful for both SMEs and lending financial institutions. It is impossible that the introduction of this scheme will entail serious risk for lending financial institutions in all cases. We are consulting with the METI and the Ministry of Finance in order to provide a safety net so as to prevent such risk. The provision of a 40% guarantee means that the burden is shared almost evenly (between the Credit Guarantee Association and financial institutions). Although the issue is how much of the risk financial institutions should bear if they are to bear the risk, you should also contemplate that it is unlikely that the risk will always materialize. I do not believe that.

Q.

Do you concede that as borrowers who need a ''moratorium'' now are facing a difficult fund-raising situation, many of them may have a higher risk of defaulting than well-performing companies?

A.

I do not know that. What about your newspaper company's management condition?

Q.

Our company's condition is difficult.

A.

I suppose so. However, does that mean your newspaper company has no hope for the future? If it has no hope for the future, you should quit it immediately. Just because a company faces difficulty now, does it mean it has no hope for the future? It depends in part on your efforts. It also depends on the future condition of the overall economy. It is the same for all companies. If you insist such a thing, you might as well say that your company would not be able to get any loans. That would be the case if you only look at the current situation.

(End)

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