Press Conference by Shizuka Kamei, Minister for Financial Services

(Excerpt)

(Tuesday, February 2, 2010, from 5:47 p.m. to 6:00 p.m.)

[Questions and Answers]

Q.

Hearings related to the reform of the postal businesses have been concluded for now. Could you tell us about problems that have come to light through the hearings and provide a rough schedule for when a draft plan will be drawn up?

A.

As we had single-mindedly moved toward postal privatization at a rapid pace, individual financial institutions have been acting in accordance with that move. Now that we are making a 180-degree turn, financial institutions are wondering how their business will be affected. In this respect, I strongly felt their keen interest in how the renewed Japan Post will operate. To put it simply, financial institutions are worried that the private sector may be squeezed. My impression is that they are strongly worried that the level playing field of competition may be destroyed if Japan Post Bank and Japan Post Insurance pursue new businesses on the basis of the credit of the government.

As I have been saying, I am not interested in creating new megabanks or huge financial institutions like Bank of Tokyo-Mitsubishi UFJ and Sumitomo Mitsui Banking Corporation or huge insurance companies. Nor do I believe that creating huge banks and insurance companies is necessary for the Japanese economy or for the people's lives. As I have been saying, we will reform the postal businesses because we believe that we must not allow the privatization carried out by the former Prime Minister Junichiro Koizumi to significantly undermine the mission performed since the Meiji Era for the sake of the country and local communities by the postal businesses, which used to be essential to the people's lives. Therefore, as I have said over and over again, our basic stance is that the postal businesses should start over as an organization capable of fulfilling the social functions that Japan Post has assumed since the Meiji Era, rather than pursuing acting as a pure financial institution. Our cabinet resolution (on October 20) has also set forth such a direction. Therefore, as for Japan Post Bank and Japan Post Insurance, the purpose of their reform is not expanding their operations and generating huge profits for Japan Post while squeezing the private sector. In this respect, there is no cause for fear. “Shinkin” banks and credit cooperatives are also playing a very important role, including their contributions to the local community ties. As for the insurance business, small agents (insurance brokers), who are scattered here and there, are also playing an important role in local communities, rather than merely earning profits. Therefore, if such regional financial institutions are squeezed as a result of the revitalization of post offices, this reform would be meaningless. Our basic stance is that the reform would be meaningless unless “shinkin banks,” credit cooperatives and insurance brokers operate vigorously at the same time as post offices make contributions to local communities and the whole of Japan through their vigorous activity, so we are struggling to find a desirable approach.

In relation to that, there is the issue of the employment arrangement at the postal businesses. About 220,000 non-regular employees are working for the postal businesses. The question is whether this employment arrangement is the best. Besides, some of those employees are dispatched workers, we think that this employment arrangement should… If they are employed merely as providers of labor, as a tool, as cheap labor, as promoted by the previous LDP-Komeito government and the Koizumi politics, we must change that situation. We have asked (Japan Post) President Saito to find out and report to me the actual employment conditions and what kind of jobs they are actually doing. If it is necessary to change the employment arrangement so as to care about humans and care about employees, our review and reform must go as far as to tackle this issue. That will be easier said than done, so I am racking my brains and I would like to actively seek opinions from various quarters. Although formal hearings have been concluded for now, we have not yet asked the opinion of Japan Post's labor union. From now on, we will spend some time on listening again to the opinions of , for instance, “shinkin” banks, credit cooperatives and second-tier regional banks in particular. I think we need to communicate with them about further details, so to speak, including whether they can or are willing to tie up with Japan Post for further cooperation.

However, as most of my time is taken up by the Budget Committee of the Diet, this will be like a race against the clock. Mr. Otsuka (senior vice minister) and Mr. Hasegawa (vice minister for internal affairs and communications) are working hard. That is the overview of the current situation.

If you have any good ideas, please feel free to suggest them to me. When I asked for opinions from foreign correspondents yesterday, they gave me good advice from their own viewpoint and I learned a lot, indeed. I am not saying this as a diplomatic nicety but I am speaking honestly. As you are living in Japan as natives, I presume that there is all the more reason for you to have good ideas in this regard, so please feel free to suggest your ideas to me. You may do so in a setting different from a press conference held here. You may want to come to my office and suggest your ideas to me. As we should by all means avoid the folly of having to make corrections or amendments after enacting the bill, we will be very careful in drafting it.

(End)