Press Conference by Shizuka Kamei, Minister for Financial Services

(Excerpt)

(Tuesday, February 23, 2010, from 8:48 a.m. to 9:05 a.m.)

Q.

Tomorrow, the Legislative Council (of the Ministry of Justice) will start a discussion on the review of the Companies Act, in which I expect the FSA staff will also participate. I understand that, in relation to how corporate governance should be improved, the council will discuss the idea of making it mandatory to appoint outside directors or review the relationship between parent and subsidiary companies. How would you like the council's discussion to develop?

A.

I believe that companies do not exist only for the sake of shareholders, although there are various opinions. As companies are social entities, the council should study how companies should behave so that they can fulfill their role as such entities.

In relation to how companies should behave, various opinions have been expressed about the proposed requirement for the disclosure of executive remuneration. Some people may resent the proposal for the mandatory disclosure of executive remuneration of 100 million yen or more and may want to keep their pay undisclosed. However, I think that there is no reason to be ashamed to receive executive pay, so there should not be such a fuss over the disclosure requirement.

Q.

Will the (amended) Money Lending Act be put into force as scheduled?

A.

A project team is conducting a study on problems that may impede smooth enforcement of this (the amended Money Lending Act). However, such study should not last forever. As this act is scheduled to be put into force in June, we must identify possible problems and make clear how to resolve them by around the end of March or so.

Q.

In relation to the postal business issue, you said that you gave up the idea of raising the upper limit on the payoff scheme (limited deposit insurance). Are you considering any other incentives so that you can obtain the understanding of “shinkin” banks and credit cooperatives on your objective of raising the ceiling on the postal savings amount (per customer)?

A.

It is not my “objective” to… Forgive me for finding fault with your choice of words but I would like to keep it accurate as this is a press conference. Raising it (the ceiling on the postal savings amount) is not necessarily my goal. Although a news reporter of a certain media organization yesterday asked me an irrelevant question like, “Are you going to raise the ceiling even if ‘shinkin banks’ and credit cooperatives oppose it?” that is not what I am trying to do. Though you may have the prejudice that I am not a sensible man, I am hearing various opinions without prejudice. While I may be prone to prejudice as is human nature, I am still holding hearings as I would like to hear as broad a range of opinions as possible from various angles. As for the ceiling on the postal savings amount, some people say it should be abolished, while others argue that it should be raised to a certain level. Some people say that the ceiling should be kept as it is. I am still considering such various opinions.

Honestly speaking, I have not yet made up my mind. I seldom…although I may sometimes tell a lie, I am not a habitual liar. Everything has pros and cons. There are always both positives and negatives. Therefore, we must do our best to reduce the negatives, and that is the challenge we are struggling with now.

Q.

Let me make sure about something that you mentioned earlier in relation to the money lending business. You just said that it will be necessary to identify problems and to make clear how to resolve them by around the end of March. May I take that comment to mean it will be necessary to decide everything as a package, including what measures should be implemented in order to facilitate smooth enforcement (of the amended Money Lending Act”)?

A.

I have not yet received a progress report on the status of deliberation by the project team. I will need to give instructions regarding specific matters after receiving a report on the status of deliberation. I will make judgment as to whether it will be necessary to take measures as a package after receiving the report.

Q.

Then, you must first receive the progress report…

A.

That's correct. This involves various difficult issues, such as how people who have actual needs (for consumer loans) will be affected by the entry-into-force of the act in June and how to mitigate the impact on such people.

My standpoint is that of borrowers, rather than lenders. I will not pay much attention to lenders' complaints such as that the business have become less profitable than before because of the expected entry-into-force of the act. Rather there are many matters that we must consider from the standpoint of borrowers.

(End)

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