Press Conference by Shozaburo Jimi, Minister for Financial Services
(Tuesday, July 20, 2010, from 12:21 p.m. to 12:53 p.m.)
[Questions & Answers]
There was a press report last weekend which indicates that the life insurance industry has been increasing its political donations since 2005, the year the problem of missed life insurance payments was brought to light. It was pointed out in the report that this smacks of an attempt to receive favorable treatment in terms of administrative disposition. As this issue of the life insurance industry's suspected political machination attempt in relation to non-payment cases has been raised repeatedly in the last regular Diet session as well and I believe that the Financial Services Agency (FSA) replied that it would launch an investigation, I would like to hear how you view the issue.
I understand that the administrative disposition against insurance companies with respect to missed insurance payments, etc. was issued in July 2008. From what I heard, ten companies were subjected to a business improvement order, which reflects the FSA's strict line against them in view of the payment management structure of each insurance company and in line with the administrative disposition rules. I do not know about their attempt to influence Diet members and other matters that you have just described. At that time, I was either in opposition or did not hold a Diet seat.
In any case, my understanding is that the disposition at issue was, as a matter of fact, a reflection of the FSA's strict judgment based on how the respective insurance companies were managing payments, etc. and in line with the administrative disposition rules, and did not involve consideration of any other factors. The FSA is committed to continuing to follow up on this issue to make sure that each insurance company should engage in appropriate payment and other practices.
I am Minoru Sasaki, a freelance journalist.
I would like to ask about the Incubator Bank of Japan, for which criminal proceedings are currently in progress, but from a slightly different angle - I am interested in hearing about the issue involving the connection between the Incubator Bank of Japan and the financial administration. As you know, the initial development leading up to the creation of this bank involved the fact that Mr. Heizo Takenaka became the Minister for Financial Services in the Koizumi administration and then a plan to solve the non-performing loan problem was developed in the name of the Program for Financial Revival. This plan came to be known as the "Takenaka Plan" and served as a pillar of the subsequent financial administration, and Mr. Kimura was among the principal figures who were dealing with the part of the program that concerned faster banking license administration. In the meantime, when Mr. Kimura was an incumbent advisor to the FSA later on, he provided a consulting service, charging 100 million yen, that thereafter led to the acquisition of the license for the Incubator Bank of Japan and then acquired the license for the bank at record speed - that is what I suspect took place in the development leading up to its creation. If so, it seems to me that the developments behind the Incubator Bank of Japan, including its creation as a product of the Takenaka Plan, are very closely connected with the financial administration. Assuming that it is the case, it might be necessary to look into the past developments that have shaped the Incubator Bank of Japan into what it is now, going all the way back to the time when the Takenaka Plan was underway. What are your thoughts on such a viewpoint?
This Mr. Kimura was, as you have just pointed out, in the post of an advisor to the FSA for a certain period of time before becoming involved in the management of the Incubator Bank of Japan. I find it extremely regrettable that a person with such a background was recently arrested for allegedly obstructing an inspection. The FSA is determined to watch the progress of the investigation and also thoroughly follow up on, and rigorously supervise, the implementation and effectiveness of the business improvement plan of the Incubator Bank of Japan that is in place under the FSA's administrative disposition.
I believe that I also said this at my last press conference, but it is also true that Mr. Kimura participated in the deliberations regarding the formulation of the financial inspection manual, the Program for Financial Revival and other policies as a project member. That said, as I described by using the expression "one of them," there were several people who took part in the formulation of the inspection manual, etc. Thus, I understand that they were not his solitary work, but were a product of proper procedures involving the participation and discussions by a large number of other experts from various fields and based on a wide range of views contributed by all those project members.
That is how I see the matter as the Minister, and I feel responsible for delivering strict supervision, taking into consideration issues that have been raised and bearing in mind the time-tested importance of trust in financial services.
Aside from the inspection manual and so on, I presume that it cannot be permissible for anyone in the normal context to serve as an incumbent advisor to the FSA on one hand and engage in a consulting service associated with the FSA's licensing administration on the other. In the case of the FSA, however, this has effectively been let go with impunity all the while up until now. Isn't it necessary to inspect conduct like this?
To tell the truth, this was the first time that I heard that when he was in the post of an advisor, he was also a consultant offering advice on the licensing for the banking business, which cannot be operated without the license. Let me make a proper statement next time on this and surrounding matters because I do not know what the fact was in that respect - I am going to look into that. In line with the role of the financial administration as an open authority for the people, I will do my best in my capacity as the Minister to deliver authoritative and rigorous supervision to address those matters, bearing in mind the importance of trust from the public.
I am Iwakami, a freelance journalist.
My question is somewhat related to Mr. Sasaki's question and is kind of an addition to it. You have just said that as you are ill-informed about the financial administration back then, you will formally check the matter and then come back with a reply. The key issue in so doing might be Mr. Takenaka's responsibility for selecting Mr. Kimura to assume the post of an advisor to the FSA then and whether Mr. Takenaka's leadership had a host of controversial aspects. At the same time that you look into those matters, could you please also give us your current view as to whether or not the practice of Mr. Takenaka's leadership in his capacity of the Minister for Financial Services or, put another way, the practice of the financial administration, was appropriate in those days?
I am intending to give a dependable account next time, including on the points that you have just raised.
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