Press Conference by Shozaburo Jimi, Minister for Financial Services

(Excerpt)

(Friday, September 16, 2011, from 9:35 a.m. to 9:45 a.m.)

[Opening Remarks by Minister Jimi]

Today, I do not have anything particular to announce.

[Questions & Answers]

Q.

I understand that regarding the damages compensation for Tokyo Electric Power's nuclear power station accident, Minister of Economy, Trade and Industry Edano has implicitly called for partial forgiving of debts by saying that creditors such as financial institutions should naturally shoulder a burden that would have arisen without government support. In response, people in the financial industry have expressed opposition, saying that they are not assuming the possibility of forgiving debts. As the minister responsible for overseeing financial institutions, how do you view the necessity of forgiving debts?

A.

Although I am aware of Minister Edano's remarks, I would like to refrain from making comments. However, as I said at a press conference held at that time, when the damages compensation scheme was under debate, Mr. Edano was Chief Cabinet Secretary. Six cabinet ministers participated in the debate. I was Minister for Financial Services, while Minister Yosano had the experience of serving as the Minister for International Trade and Industry. Minister Yosano strongly requested that two of us be allowed to join the debate at that time, when the Kan cabinet was in office, and as Mr. Kaieda, who was Minister of Economy, Trade and Industry at that time, agreed to that, we joined the debate on the draft of the scheme halfway through it. Therefore, I have certain knowledge about this matter. In relation to the support for Tokyo Electric Power, what kind of cooperation the company seeks from stakeholders and how stakeholders, including financial institutions, respond are matters to be determined through consultations between private business operators, so my understanding is that the Financial Services Agency is not in a position to make comments. In any case, regarding the compensation issue, it is important to pay damages compensation in a prompt and appropriate manner, and another important thing is, as you know, to avoid causing unnecessary, unexpected adverse effects on the stability of the financial and capital markets, on the principal premise that stable electricity supply should be ensured. We will continue to carefully monitor market developments.

The paper on the basic outline of the scheme, which was naturally made public, referred to the stability of the financial market, as I understand it. Naturally, as this is a matter to be settled between private companies, it is a basic premise that Tokyo Electric Power should pay the full amount of damages compensation as a private company. The company will rehabilitate its business while conducting activity as a private company. If Tokyo Electric Power is to survive as a private company in a liberal market, the government should not intervene in this matter, which should be settled between private companies, since principles are principles. That is how the market works.

As I said some time ago, there are outstanding corporate bonds issued in Europe by Tokyo Electric Power. The company has issued euro-denominated bonds worth 180 billion yen. As economic globalization has gone very far, Japan's authority does not extend into the market for euro-denominated bonds, as you know. Naturally, international economic rules should be observed there, and I mentioned that in the Diet. In the present era, the economy is operating outside the reach of national sovereignty in some aspects amid globalization. Therefore, unless policies are coordinated globally among the G-7 and G-20 countries, it is hard to achieve results. I think that some contradictions have arisen between economic globalization and the national sovereignty that has been upheld since around the 18-19th century. How we humans should resolve the contradictions is a very important issue. As this is a matter concerning free enterprise, or private business, Tokyo Electric Power should consult with financial institutions. The results should be reported to the government. That is the arrangement of this scheme, as I understand it, so as the Minister for Financial Services, I believe that that arrangement should firmly be followed as a principle.

Q.

Your view appears to be different from Mr. Edano's.

A.

He made various remarks when he was Chief Cabinet Secretary, and it is not clear to me whether there are differences between our views. However, as the scheme is prescribed in writing and a relevant law has been enacted, the most important thing is to respect the spirit of the scheme, so we should not kick up much of a fuss. He knows that Tokyo Electric Power will be allowed to survive as a private company so that it can properly pay damages compensation. As you know, if the civil rehabilitation procedure is used, debts will be reduced. If that happens, people who will suffer most will be the nearly 100,000 residents who cannot return to their homes due to radioactive contamination. In accordance with the principles of the Act on Contract for Indemnification of Nuclear Damage Compensation, Tokyo Electric Power should properly bear the burden, and to that end, it was necessary to keep the company operating as a free enterprise, a private company. That was the biggest reason. That was the key point, although various ideas, including compensation payment by the government, have been considered because there are limits to what can be done by a company.

Q.

Is it possible to require financial institutions to forgive debts?

A.

As Tokyo Electric Power is a private company, it is natural that the company's managers hold various negotiations. They are free to do so, as the freedom of corporate activity is assured. That the results of the negotiations should be reported to the government is the crux of the law.

(End)

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