Press Conference by Tadahiro Matsushita, Minister for Financial Services
(Tuesday, July 10, 2012, from 8:35 a.m. to 8:45 a.m.)
[Opening Remarks by Minister Matsushita]
As the House of Representatives' Budget Committee concluded its deliberation, deliberation will start in the House of Councillors today. I feel regret that there have been few questions concerning financial and economic issues. The debate focused on the consumption tax and issues related to the defection of lawmakers from the Democratic Party of Japan as well as the Okinawa issue, but I, as a freshman minister and as the minister for financial services, feel that a broader range of issues should be debated. I will closely watch what will be debated in the House of Councillors today.
That is all I have to say.
[Questions & Answers]
Last weekend, Olympus Corporation's auditing firms were ordered to improve its business operation. How do you feel about that? Also, how is discussion on the supervisory standard progressing, which I hear is being conducted with a view to possible revision?
On July 6, the Financial Services Agency (FSA) ordered KPMG Azsa and Ernst & Young ShinNihon to conduct such improvement. That demonstrates the intentions of the FSA and me as the minister for financial services. In order to ensure the fairness and transparency of the market, appropriate and strict accounting auditing is important, so I strongly hope that business management systems that ensure more effective auditing will be developed. We targeted KPMG Azsa and Ernst & Young ShinNihon in particular because we strongly hope that, as major auditing firms, they will make appropriate efforts.
As for measures that the FSA may take to prevent a recurrence of this scandal in light of the results of our investigation, while we have already taken various measures, the Business Accounting Council's Audit Committee is now considering auditing procedures for detecting accounting fraud based on the idea that such procedures should be enhanced by fully taking account of the problems in this case.
I would like to ask you about the impact of the illegal manipulation of LIBOR (London Interbank Offered Rate), which is used as a benchmark interest rate, on the industry, including Japanese financial institutions.
I have one more question. Regarding TIBOR (Tokyo Interbank Offered Rate), is the FSA considering taking any measures, such as investigating possible illegal manipulation?
As for the LIBOR problem, foreign authorities are conducting investigation, so I cannot say anything definite about the impact on Japanese financial institutions. The FSA refrains from making comments.
Regarding TIBOR, I would also like to refrain from commenting on specific administrative measures the FSA may take.
Generally speaking, the FSA has been checking individual financial institutions' internal control systems through inspection and supervisory activities. If a problem is recognized regarding a financial institution's internal control system, the FSA will take firm and appropriate action as needed.
I understand that the Growth Finance Promotion Council has decided to establish a system to utilize dormant deposits by the end of fiscal 2014. Financial institutions have pointed out that utilizing dormant deposits would be difficult. Is the plan feasible and how will it be implemented?
Yesterday, the Growth Finance Promotion Council held a meeting. At the meeting, discussion was held based on the recognition that it is important to create new wealth by managing the people's assets and to return it to the people. As a result, this recognition is reflected in the council's report as a policy measure. As we believe that doing things along this line will be good, we agreed to it.
Is the plan feasible?
In light of the characteristics of Japan and on the premise of depositors' and other relevant people's understanding and consent, we need to give due consideration to several points of debate, including how to ensure depositors' trust and convenience, legal treatment of the property rights regarding dormant deposits, how dormant deposit accounts should be managed, by whom they should be managed and how to secure and share the costs of repaying and managing deposits. It is necessary to consider whether an effective and sustainable system can be established after considering these points of debate.
The FSA will continue to offer cooperation in deliberation on this matter from the practical perspective in light of the final report. That is what I said yesterday.
Let me ask you about the insider trading cases.
The financial authorities have so far exposed four cases (so in original) of insider trading related to public offerings of new shares. All those cases occurred in 2010 and the trading volume was small in all of them. Are those cases the tip of the iceberg or can we say that there are no more cases that have not been discovered? Have the authorities taken adequate actions?
As to the question of whether the actions taken are adequate, I, as the minister in charge, cannot answer in the affirmative. There are deep-seated problems, so we will need to continue to take appropriate actions with a strong resolve and interest. That is what we are talking about within the FSA.
Foreign investors are wondering why insider trading cases are emerging now and why the authorities are trying hard to expose such cases. Some people are speculating that the authorities are working desperately to regain public confidence in the Tokyo market so that they can deflect criticism of their slow response in the AIJ case. What would you say to that?
I suppose there are various ways of looking at our actions, but I believe that the FSA is taking appropriate and strict actions while bearing in mind the economic situation and other circumstances of the time.
All the same, we can never do enough regarding problems like this, as you pointed out, so I believe that it is important to continue taking appropriate actions with a sense of alertness.
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