Press Conference by Tadahiro Matsushita, Minister for Financial Services
(Tuesday, July 24, 2012, from 9:28 a.m. to 9:39 a.m.)
[Questions & Answers]
Last weekend, in relation to the illegal manipulation of interest rates, a media report said that the U.S. Securities and Exchange Commission had requested the Financial Services Agency (FSA) to cooperate in investigation as to whether or not U.S. banks had engaged in illegal practices in relation to TIBOR (Tokyo Interbank Offered Rate). Is that true? If so, how will the FSA respond to the request?
I am aware of the media report that you mentioned. As to specific communications between the financial authorities or specific actions by the authorities, including foreign authorities, I would like to refrain from making comments.
Generally speaking, the FSA has already been cooperating and communicating with foreign authorities as needed and we will continue to cooperate with relevant authorities as needed.
In any case, I recognize that illegal manipulation of LIBOR (London Interbank Offered Rate) and TIBOR, which are widely used as important benchmark interest rates in the financial market, could undermine the fairness and transparency of the market and obstruct the sound development of the market, so I am keeping a close watch on this matter as a very serious problem.
As I have repeatedly mentioned, if a problem is recognized, the FSA will take appropriate actions in accordance with laws and regulations.
I am Abe from Facta Publishing.
Regarding the question related to HSBC and Hokuriku Bank that you declined to answer last week by citing your lack of knowledge about details, I have three questions.
First, the U.S. authorities are expected to impose a fine, estimated by some people to be as much as \80 billion, on HSBC. In a report on this case, it is pointed out that Hokuriku Bank is likely to have been involved in money laundering related to travelers' checks signed by a Russian used-car dealer. If Hokuriku Bank was involved in money laundering, it would constitute an inappropriate transaction under Article 26 or 27 of the Banking Act, so are you going to consider taking action against the bank? Could you tell me about the facts and offer your thoughts on the responsibility of the bank's management team?
Second, regarding money laundering, the National Police Agency's Financial Intelligence Unit (FIU) is due to cooperate with the FSA. According to the report, in Hokuriku Bank's failing to disclose the details of transactions to HSBC, it cited client confidentiality, despite repeated inquiries. What have the FSA and the FIU been doing over the seven years since 2005, during which the suspicious transactions have been going on?
Third, the report cites the names of many South Korean companies, including SK Trading. As for Japanese companies, a Japanese used-car exporter that shipped used cars to Russia received payments from those companies in the form of travelers' checks. To what extent has the involvement of the Japanese company, which was not mentioned in the report, been exposed through the FSA's cooperation with the National Police Agency?
If Japanese companies are found to have been involved in money laundering, do you intend to investigate the status of transactions at regional banks that are located along the Sea of Japan coast, in addition to Hokuriku Bank?
I am aware of that report. However, as this is a matter concerning an individual financial institution's transactions, I would like to refrain from making comments.
Generally speaking, it is very important that individual financial institutions establish appropriate business operation systems, including systems that ensure customer identification and the reporting of suspicious transactions, so as not to be exploited in financial crimes such as money laundering.
The FSA is striving to grasp the situation of individual financial institutions' development of such systems through inspection and supervision, and we will continue to take appropriate actions in accordance with laws and regulations.
Let me ask just one more question. The U.S. Senate report pointed out that Hokuriku Bank did not have an internal anti-money laundering organization that keeps surveillance over possible money laundering activities. In short, the U.S. side pointed out a compliance-related institutional defect of the bank. If Hokuriku Bank failed to conduct internal investigation regarding the travelers' checks in question because of the lack of such an organization, that should trigger an order for business improvement, I would presume. What would you say to that?
As I have already said, I would like to refrain from making comments at this time.
In any case, the FSA is striving to grasp the situation of individual financial institutions' development of business operation systems through inspection and supervision, and we will continue to take appropriate actions in accordance with laws and regulations.
Thank you very much.
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