Press Conference by Tadahiro Matsushita, Minister for Financial Services
(Friday, August 17, 2012, from 11:30 a.m. to 11:48 a.m.)
[Opening Remarks by Minister Matsushita]
As you may know, the minister of finance commented on the budget request guideline for fiscal 2013, among other matters, at the cabinet meeting. This guideline was formalized at the cabinet meeting. In relation to that, the minister of internal affairs and communications and other ministers also made various comments. The compilation of the budget for the next year is about to start, with the deadline for budget requests set for September 7, so the Financial Services Agency (FSA) will work with other ministries and agencies.
[Questions & Answers]
First, in relation to the voluntary review being conducted under the initiative of the Japanese Bankers Association (JBA) regarding TIBOR (Tokyo Interbank Offered Rate), banks submitting TIBOR rates reported to the JBA last Friday. Meanwhile, it has been reported by media that a proposal for the reform of LIBOR (London Interbank Offered Rate) will be formulated in the United Kingdom by September. Could you tell me how the FSA intends to approach the revision of the TIBOR system in line with moves like that?
As I already told you, I am aware that the JBA will consider revising the TIBOR system if necessary in light of, first, the results of the review required by the JBA as the organization responsible for calculating and publishing the TIBOR rate, and second, the status of deliberation on the LIBOR reform in the United Kingdom.
I believe that the management of TIBOR, including judgment as to whether it is necessary to revise the TIBOR system, is a matter on which the JBA is responsible for conducting deliberation, and I strongly hope that the JBA will appropriately deal with this matter.
As the illegal manipulation of interest rates is a serious problem that could undermine the fairness and transparency of the financial market, the FSA is keeping a close watch on the JBA's activities.
Earlier, you mentioned the budget compilation. As the budget request guideline was formalized at today's cabinet meeting, I expect that the FSA will consider what requests to make in relation to tax system reform as well as what budget requests to make. Could you tell me about the FSA's priority matters in formulating its requests?
The FSA staff is now conducting in-depth deliberation. First, the FSA faces the major challenge of supporting the management improvement and business rehabilitation of small and medium-size enterprises (SME) in light of the final extension of the SME Financing Facilitation Act.
Second-in this respect, you news reporters have asked various questions-we must appropriately deal with the double loan problem. In the region devastated by the Great East Japan Earthquake in particular, challenges have piled up, and we must appropriately tackle them.
Third, regarding the problem related to companies managing assets under discretionary investment contracts, namely the AIJ problem, we must take recurrence-prevention measures and appropriate administrative actions in relation to insider trading related to public offerings of new shares so as to ensure the credibility of the financial and capital markets.
Fourth, the FSA must involve itself in the Japan Revitalization Strategy. This strategy was formalized at the cabinet meeting on July 31. The introduction of the so-called Japanese version of the ISA (Individual Savings Account) and the establishment of a comprehensive exchange are challenges that I have been tackling since I was state minister of economy, trade and industry. There is the issue of how much we can contribute to ensuring the sustainable growth of the Japanese economy on the financial front through these measures. We must tackle these challenges.
We will make efforts to ensure that appropriate budgetary measures are taken to cover expenses necessary for enhancing our organization and staff, and implementing operations smoothly so that we can fully perform our duties by dealing with the many challenges that we face in the Japanese financial and capital markets in an adequate and timely manner.
In particular, in light of the size of the previous year's budget, we must keep in mind that the FSA needs to conduct financial administration and deal with the postal privatization issue by fully exercising its brainpower. The FSA is different from other ministries and agencies, which spend trillions of yen on project implementation, so we will perform our duties by fully exercising our brainpower.
As for our requests related to tax system reform, the FSA is considering what tax measures are necessary. Although I have received some information from the FSA staff, it is too early for me to tell you about that. We would like to make requests that will lead to effective reform. We hope to make progress bit by bit in overcoming the financial challenges that we now face. The FSA will decide what requests to submit and make efforts to ensure that the requests are met after substantive discussions to be held at meetings of the Tax Commission and on other occasions.
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