Press Conference by Shozaburo Jimi, Minister for Financial Services

(Excerpt)

(Tuesday, June 22, 2010, from 11:20 a.m. to 11:44 a.m.)

[Opening Remarks by Minister Jimi]

Good morning.

As you are well aware, the revised Money Lending Act was fully enforced in the fourth stage last Friday, on June 18. Prior to its full enforcement, the Project Team on Money-Lending Systems-chaired by Senior Vice Minister Kouhei Ohtsuka-was established for the purpose of studying the measures to be taken to facilitate the implementation of the Act. The Team ultimately compiled "10 Measures to be taken for the Borrowers Contrived from Their Perspective", as you may already know.

Today, the Revised Money Lending Act Follow-up Team was established in the government, in the Financial Services Agency (FSA), to replace the Project Team in order to facilitate the implementation of the amended Money Lending Act and promptly examine appropriate ways to respond to situations in a timely manner.

The specifics of the Follow-up Team's activities and its members are as described in the handout distributed to you. To begin with, the Follow-up Team will disseminate the information involving the amended Money Lending Act in a more thoroughgoing manner than ever before, as we were criticized for inadequate publicity in the previous press conference. This will be executed extensively through such media as newspapers and TV, as well as the Internet, including the FSA's website. Also to start with, fact-finding will be conducted with respect to the implementation status of the amended Money Lending Act and its socioeconomic impact. Having read various newspapers and watched a wide range of TV programs, I also believe it is important to first get an accurate grasp of the actual circumstances. Furthermore, checks will be performed on the systems associated with the amended Money Lending Act. The Team will aggressively carry out activities focusing on these three areas.

The FSA will do everything possible to facilitate the implementation of the revised Money Lending Act through such efforts. In other words, we will closely follow up on developments after the full enforcement of the revised Money Lending Act, and as necessary, respond to situations in a speedy and appropriate manner.

The Follow-up Team was established immediately after the full enforcement of the Act last Friday; I cannot remember other instances in which this type of "follow-up team" was established by the government, at least based on 25 years of my experience in the world of politics and government administration. Having said that, there has been a change in government, so we hope to engage in administrative affairs from the viewpoint of the people-in this case, the borrowers-in accordance with the "From concrete to people, people, people" policy. We intend to work on this on a government-wide scale, with the FSA playing a central role and collaborating with a number of related ministries and agencies such as the Consumer Affairs Agency, the Ministry of Health, Labour and Welfare and the National Police Agency, including their administrative staff, as I have requested to Senior Vice Minister Kouhei Ohtsuka.

I have nothing further to add.

[Questions & Answers]

Q.

The handout states that the job of the Revised Money Lending Act Follow-up Team is to thoroughly publicize the new systems and get an accurate grasp of the impact. In the context of "follow-up", will the Team go as far as to revise the Act and take additional measures if there are any inadequacies found in the current Act?

A.

That is a very good question. Obviously, our top priority is to first get a grasp of the actual situation. Once the results are out, we will perform checks from the borrowers' perspective. In particular, as you know, provisions have been established to exempt sole proprietors and corporations from the application of the Act and treat them as exceptions; yet, there have been newspaper and TV reports about such provisions not being widely known. While taking such matters into account, we will deal with the situation in a speedy and appropriate manner as necessary.

Q.

I am Sonoda from Hokenmainichi Shimbun

In your previous press conference, you stated that it is important to protect financial institutions and business corporations. Speaking of the consumers, however, Alternative Dispute Resolution (ADR) procedures for financial services will be launched in October. What are your thoughts on this?

A.

I think it is important to protect both of them. In other words, consumers or users of financial services are individual human beings and will therefore be protected properly. It is also important that financial institutions put themselves in the shoes of borrowers-that is, the users of financial services-such as small- and medium-sized enterprises (SMEs), micro enterprises and large companies. At the same time, it is important that financial institutions are stable, so ensuring their sound management is obviously vital. Especially in the case of mega banks, given that we are already living in the world of global financial market, it is important that they properly fulfill their missions in that context as well. It is not a matter of "either/or", as both of them are extremely important to us as a financial regulator and supervisor.

Q.

I am Namikawa from Toyo Keizai.

The government has announced its New Growth Strategy, including the Financial Strategy, which states that "markets and exchanges will be developed and financial legislative reform and other such initiatives will be carried out to bring about progress in the finance sector itself as a growing industry". Was the FSA involved in the study process of the Financial Strategy? How will such "financial legislative reform" be carried out in the future?

A.

As I have explained the other day, it is what is called the "comprehensive exchange", rather than an exchange that only deals in securities and financial transactions… As you are aware, "commodities" exchanges are largely under the jurisdiction of the Ministry of Agriculture, Forestry and Fisheries (MAFF) and the Ministry of Economy, Trade and Industry (METI), so in a nutshell, the idea is to create an all-embracing "comprehensive exchange" where all such boundaries are removed. Studies on this have been conducted to date mainly by Senior Vice Minister Kouhei Ohtsuka and Parliamentary Secretary Kenji Tamura. Now that the New Growth Strategy has been approved by the Cabinet, we will devote ourselves to materializing it.

Q.

Does the phrase "financial legislative reform and other such initiatives will be carried out" refer to legislative reform aimed at creating a comprehensive exchange?

A.

Yes, that is one of the tasks, as a matter of course.

Q.

A Diet member of the Liberal Democratic Party is one of the external directors of the Incubator Bank of Japan (Nihon Shinko Ginko), which the FSA has filed criminal charges against. We checked the Bank's website this morning and found his name still being listed. What are your thoughts on this matter?

A.

I am aware of that fact, having read the documents. Each and every Diet member must… given that members of the Diet have been elected by their respective constituencies to comprise the highest organ of state power, they should properly examine their own conduct by themselves.

(End)