Press Conference by Shizuka Kamei, Minister for Financial Services

(Excerpt)

(Friday, February 5, 2010, from 5:55 p.m. to 6:21 p.m.)

[Opening Remarks by Minister Kamei]

I will probably announce a draft, or I should say the outline, of a bill for the postal reform next Monday, although it has not been decided whether the announcement will be made before or after the Diet's Budget Committee meeting scheduled for that day.

Thereafter, we will seek opinions again from the three ruling parties and other various quarters and finalize the bill around late February or early March. As to the timing of Monday's announcement, you will be informed later. This is all I have to say.

[Questions and Answers]

Q.

I would like to ask you about the draft plan for the postal reform that you mentioned. Although the People's New Party and the Social Democratic Party have indicated it is desirable to set the ceiling on the savings amount at 30 million yen (per person)...

A.

Opinions have been expressed by various quarters, including the financial industry and Japan Post. I would like to make a decision and finalize the bill after I lend an ear to these various opinions conscientiously.

Right until the bill is submitted, at least those two matters - the ceiling and the government's shareholding ratio - will be... As I mentioned earlier, I will announce the outline of the draft in two stages and incorporate into the bill various opinions expected to be expressed on those matters.

Q.

Do you mean that the outline that you will announce on Monday will not include the shareholding ratio and the ceiling amount?

A.

That is correct. Specific figures will not be included. I will show you a rough outline.

Q.

Then, the organizational structure and other...

A.

Various things will be included.

Also, as I said at the Budget Committee today, there are as many as 220,000 non-regular workers (at Japan Post Group). Speaking of non-regular workers and dispatched workers, it is true that there are jobs that are suited only to part-time workers, and I also think that there are people who want to work three or four hours a day as part-time workers, but I strongly reminded (Japan Post) President Saito today that all employees with some exceptions I just mentioned should be in principle turned into regular workers.

Arrangements related to the procurement of goods have also changed since two years ago. As a result, local suppliers cannot directly conclude a contract (with local post offices). Local suppliers are delivering goods through Tokyo under something like a subcontracting arrangement. I will also have this arrangement changed so that local suppliers can conclude a contract directly with the local post offices of Japan Post. Today, I strongly reminded President Saito about this point, too.

Consequently, there will be a cost increase in both cases. However, the cost is not the issue. There has been a tendency to encourage Japan Post to treat employees as something disposable for the sake of the so-called “structural reform” and the cost reduction initiative that aims to employ people at a minimum cost. I will completely eliminate that tendency, and as our stance is that Japan Post should care about and make contributions to local communities, I will make the company change its course toward that direction with regard to the procurement of goods, too.

Japan Post is responsible for not only providing the universal service but also doing things like that (contributing to local communities), so right until the submission of the bill, such issues will be...

Frankly speaking, this is a very difficult issue. The United States appears to have become very nervous and has voiced various complaints. However, I do not expect that this will put foreign companies doing business at a disadvantage, so they do not have to be so nervous.

Q.

A G-7 meeting (meeting of Group of Seven Finance Ministers and central bank governors) will be held soon, and I understand that Senior Vice Minister Otsuka will attend it. Have you given him any instructions?

A.

As you know, President Obama will take bold action regarding financial policy based on the experience of the United States - based on the reflection that the U.S. policy has damaged not only the U.S. economy but also put the global economy, including Japan's economy, in a terrible situation. The fact that the U.S. sees it that way is good for Japan, too. It would be undesirable if the United States failed to put its house in order and Japan suffered damage as a result.

As for Japanese financial institutions, as I have said over and over again, the FSA (Financial Services Agency) is supervising and inspecting them from the viewpoint of ensuring that they properly fulfill their social duties, so that we can prevent a situation in which conscientious investors and ordinary people suffer damage because financial institutions greedily pursue profits as an end in itself, as they did when the previous government was in office. We have revised the financial inspection manual (and other materials for financial administration). Therefore, for the moment, we are not considering an action like the one President Obama has announced. As the financial industry is acting in accordance with the FSA's policy under the supervision and guidance of the agency, that should suffice for the moment.

Q.

Regarding that matter, Mr. Geithner (U.S. Treasury Secretary) has said that at the G-7 meeting, he will call for coordinated moves by countries to introduce similar policy measures...

A.

I have been arguing that the United States should put its house in order first. Can it give orders to Japan before putting its own house in order? Compared with the United States, Japan is not in such a bad situation that it should be pushed around by the United States. Although financial institutions' behavior once was inappropriate in various aspects, I am in charge now

However, as Japan has also had its own bitter experiences, we cannot afford to let our guard down. I expect that Senior Vice Minister Otsuka will support Minister (of Finance) Kan from that standpoint.

Q.

In relation to the postal reform, you said you do not intend to turn Japan Post Bank into a megabank. I suppose what you meant to say is that turning Japan Post Bank into a megabank would not be in accordance with the purpose of the postal reform in the first place. If so what about maintaining the ceiling (on the savings amount) and other certain constrains on Japan Post Bank...

A.

We are still considering matters like that. As the government would require Japan Post to provide the universal service, which is not provided by ordinary financial institutions, various opinions about the ceiling have been expressed in relation to Japan Post's business operations. The financial industry has strongly asked us to avoid a significant deviation from the principle of an equal footing. Therefore, I will make a decision after continuing to seek opinions from various quarters until early March, right until the submission of the bill to the Diet.

So, after Monday, we will actively... Unless you see something like an outline, it will be difficult for you to express your opinions as you have no clue. Therefore, I will show you the outline on Monday as a springboard for debate or as a springboard for requests on Monday and then actively seek opinions.

(End)