Press Conference by Tadahiro Matsushita, Minister for Financial Services

(Excerpt)

(Friday, August 24, 2012, from 9:25 a.m. to 9:40 a.m.)

[Opening Remarks by Minister Matsushita]

I will report on the personnel reshuffle at the Financial Services Agency (FSA).

At today's cabinet meeting, a cabinet order to partially amend the Cabinet Order for Organization of the FSA, which establishes the post of vice commissioner for international affairs (Kokusai-Seisaku-Tokatsukan) that is comparable to the director-general post, was formalized. The new post has been created in light of the importance of international debate on financial regulatory reform, which is a major global challenge, and our international operations, including our response to the European fiscal and financial problems.

Masamichi Kono will be appointed to the new post, effective August 29.

The reshuffle of directors-general and officials with higher ranks at the FSA will be made as shown in the paper distributed to you. Among the officials who will remain in their current posts are FSA Commissioner Hatanaka, Director-General Morimoto of the Planning and Coordination Bureau, Director-General Kuwabara of the Inspection Bureau, Director-General Hosomizo of the Supervisory Bureau, Secretary-General Takeno of the Executive Bureau at the Securities and Exchange Surveillance Commission, and Vice Commissioner for Policy Coordination Mori.

[Questions & Answers]

Q.

First, regarding the Senkaku and Takeshima islands, tensions between Japan and China and South Korea are rising. What financial and economic impacts do you expect that will produce, including the impact on the Japanese market and real economy?

Also, specifically how do you expect Japanese financial institutions will be affected?

A.

The disputes over the Senkaku and Takeshima islands are very regrettable. The government, led by the Prime Minister's Office and the Foreign Ministry, is wholeheartedly devoting itself to dealing with those disputes.

The FSA is routinely keeping a close watch on economic and market developments with strong interest. However, I would like to refrain from making specific comments on the financial and economic impacts that those disputes may produce, including the impact on the Japanese market and financial institutions.

In any case, we will keep a close watch on how those disputes will evolve, how the Japanese government will deal with them, and what financial and economic impacts they may produce, while maintaining cooperation with relevant cabinet ministers.

As the prime minister mentioned with regard to the Takeshima island dispute at an informal meeting of cabinet ministers on August 21, we will take action while keeping those disputes in mind.

Q.

Let me move on to matters related to the Diet. The bill to amend the Financial Instruments and Exchange Act (FIEA) has been passed by the House of Councillors and sent to the House of Representatives. However, as the political situation remains in flux, the prospect for the enactment of the bill is unclear. As the minister for financial services, how are you dealing with this matter and what action are you going to take in the future?

A.

The bill to amend the FIEA has already been deliberated and passed by the House of Councillors and sent to the House of Representatives. I believe that the place for deliberation has moved to the House of Representatives because each party and parliamentary group has recognized the importance of the amendment through the debate in the House of Councillors. We strongly hope to enact this bill by all means during the current Diet session.

As for recent developments related to exchanges, the move to establish Japan as the main Asian market is accelerating, as shown by the completion yesterday of the takeover bid, or TOB deal between the Tokyo Stock Exchange and the Osaka Securities Exchange, which was already reported in newspapers and on TV. In this situation, it is very important to quickly enact the amended FIEA.

As I mentioned earlier, the FSA will continue to do its utmost to ensure that the bill is fully deliberated in the House of Representatives and enacted during the current Diet session.

All of us at the FSA, including me, are doing our utmost to ensure that the bill to amend the FIEA is deliberated and enacted during the current Diet session by explaining the importance of this bill to relevant officials and organizations, including lawmakers in charge of managing Diet affairs. I will also appreciate your support.

Q.

There has been a media report that the TSE will be ordered in the near future to improve business operation. Is the report accurate? Also, could you comment on the recurrence of system glitches at the TSE?

A.

That is a very important issue. On August 7 (Tuesday), the FSA ordered the TSE to submit a report based on Article 151 of the FIEA. Regarding the system glitch that occurred on the same day, the TSE is required to examine the cause and report on measures to prevent a recurrence of similar problems.

On August 21 (Tuesday), we received a report from the TSE on the occurrence of the system glitch.

The FSA will consider what action needs to be taken after closely examining the content of the report.

Let me repeat this: the FSA will consider what action needs to be taken after closely examining the content of the report.

Q.

Could you answer my second question - how do you feel about the recurrence of system glitches at the TSE?

A.

The latest glitch occurred on August 7, which followed the one which occurred also at the TSE in February. The latest glitch led to the suspension of some transactions at the TSE, which is part of the critical market infrastructure, restricting trading opportunities for investors. As the previous glitch occurred only in February, as I mentioned, the situation is so serious that investors' confidence in the TSE may decline. The FSA regards the recurrence of system glitches as very regrettable.

Q.

Regarding the personnel reshuffle that will take effect on August 29, let me make sure about one point. Following the appointment of Mr. Kono to the new post, will somebody else succeed him in his current post? Or will the current post be superseded by the new post?

A.

The current post will be superseded by the new vice commissioner for international affairs post, which is of a higher ranking. The creation of the higher-ranking post is intended to demonstrate the importance of the job both domestically and internationally.

Q.

Isn't it that somebody else will be appointed to succeed as the current post?

A.

No, it isn't.

Thank you very much.

(End)