Press Conference by Shozaburo Jimi, Minister for Financial Services

(Excerpt)

(Friday, March 11, 2011, from 8:41 a.m. to 8:46 a.m.)

[Opening Remarks by Minister Jimi]

Today, we made a cabinet decision to submit a bill to partially amend the Financial Instruments and Exchange Act in order to strengthen the foundation of the capital market and the financial industry, and a bill to partially amend the Deposit Insurance Act.

First, the bill to partially amend the Financial Instruments and Exchange Act in order to strengthen the foundation of the capital market is intended to implement measures included in the Action Plan for the New Growth Strategy based on the financial strategy that is one of the pillars of the New Growth Strategy that was adopted upon a cabinet decision last year (June 18, 2010).

Next, the bill to partially amend the Deposit Insurance Act is intended to implement measures to smoothly wind down the collection of loans provided by jusens (specialized housing loan companies) based on the Act on the Liquidation of Jusens in light of the deadline of the end of December this year for the collection of such debts that was set by Resolution and Collection Corporation (RCC) and to review the functions of RCC following the end of the loan collection. I am hoping that these two bills will be deliberated and enacted at an early date in the current Diet session.

That is all I have to say.

[Questions & Answers]

Q.

There has been a media report that the Tokyo Stock Exchange (TSE) and the Osaka Securities Exchange (OSE) will start negotiations toward a merger. What information have you received from the exchanges regarding this? Also, how do you expect the merger to affect the plan to establish a comprehensive exchange?

A.

Although I am aware of the media report that you mentioned, I hear that yesterday, the TSE and the OSE issued comments denying that they will start merger negotiations.

In any case, as this is a matter concerning these exchanges' management decisions, I would like to refrain from making comments. Although this is the same reply as the one that I gave you yesterday, it is appropriate for me to refrain from making comments, as I have not received any formal report and these exchanges are private-sector organizations.

The plan to establish a comprehensive exchange, which combines the functions of securities, financial, and commodities exchanges, is included in the New Growth Strategy, and it is under consideration by the study team on a comprehensive exchange, which comprises the Vice Ministers and Parliamentary Secretaries of the FSA, the Ministry of Agriculture, Forestry and Fisheries and the Ministry of Economy, Trade and Industry. This team is now holding hearings with users, investors and other parties concerned.

In any case, the FSA believes that regarding issues that have been left pending in the interim report, it is necessary to promptly decide its policy in line with the concept indicated in that report. The FSA will continue to study the plan in cooperation with relevant ministries and agencies.

Q.

The jusen problem is coming to an end after 15 years. How do you feel about that?

A.

Of the secondary losses that arose in the process of collecting jusen loans, which totaled around 1,390 billion yen, the government shouldered around 690 billion yen, as I remember it. At that time, I was a Diet member of the ruling party and there was a sit-in protest in the Budget Committee. Considering that this was a very serious problem, I feel deeply about the fact that after 15 years, we enacted a law that does not require the use of taxpayer money to cover those losses.

(End)