Press Conference by Shozaburo Jimi, Minister for Financial Services
(Tuesday, November 16, 2010, from 8:44 a.m. to 8:48 a.m.)
[Opening Remarks by Minister Jimi]
I have nothing in particular to report to you today.
[Questions & Answers]
Given that the proposal that the FSB (Financial Stability Board) made to address the issue of systematically important financial institutions (SIFIs) was endorsed by the G20 Summit last week, please give us your evaluation of this development as well as your thought on its impact on Japanese banks.
From what I heard, what was endorsed at the recently-held Seoul Summit with respect to the policy proposed by the Financial Stability Board (FSB) regarding so-called systematically important financial institutions (SIFIs) was not its substance but the work processes and timelines for it for the future. What I heard is that a decision has been made on how the future timelines should be determined and in what fashion this matter should be examined by each country in the future.
For that reason, I feel that it is still not the time to make any statement about its substance.
On the subject of performance of financial institutions, please tell us your evaluation of the final financial results of the major banks that came out yesterday.
While their interest income, which represents the difference between lending interest rates and borrowing interest rates, is down in the final results for the period ending in September, their investment trust sales commissions and service fee income increased fivefold and a substantial increase in market-related profits, including government bond trading profits, coupled with a substantial drop in credit-related expenditures, resulted in a year-on-year increase in net profits on the whole for the interim period. This means that changes in long-term interest rates in government bonds brought about increased profits for Japanese banks holding government bonds.
Considering, however, that the quintessence of the financial business is to generate profits from the difference between lending interest rates and borrowing interest rates, I discern a hint of danger in that sense. I am eager to continue keeping a close watch of the management status of banks. Overall, however, I welcome the fact that their earnings have increased considerably.
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