Press Conference by Ikko Nakatsuka, Minister for Financial Services
(Friday, December 21, 2012, from 10:51 a.m. to 11:00 a.m.)
[Questions & Answers]
I would like to ask three questions concerning the illegal manipulation of LIBOR (London Interbank Offered Rate) and TIBOR (Tokyo Interbank Offered Rate).
Interest in the LIBOR problem has grown worldwide, and in Japan, too, UBS Securities Japan Ltd. and Citigroup Global Markets Japan Inc. were ordered to suspend business operation last year. The number of banks found to have been involved in the problem is increasing and severe penalties have been imposed. Could you comment on that? In addition, I would like to ask you how the Financial Services Agency (FSA) will deal with this problem. Finally, following the FSA’s business suspension order for UBS last year, am I correct in understanding that the FSA will not impose any new penalty in relation to the case centering on Tokyo-based traders against which fines totaling 1.5 billion dollars have been imposed in the United States, the United Kingdom and Switzerland?
First, I would like to refrain from commenting on the actions taken by foreign authorities. For its part, the FSA issued business suspension and improvement orders against UBS in December 2011 in relation to inappropriate efforts by UBS traders to influence LIBOR and TIBOR submissions. Since then, the FSA has been strictly monitoring the status of business improvement at UBS and I understand that the company has steadily made improvement.
The announcements made recently by foreign authorities do not include references to new facts related to UBS’s inappropriate practices. Therefore, the FSA will conduct adequate supervision so as to ensure appropriate business operation while continuing to cooperate with foreign authorities. I believe the administrative actions taken last year are appropriate.
Regarding many other financial institutions, such as Deutsche Bank and HSBC, too, various new facts have been found or reported, investigation has been conducted by authorities, and settlement negotiations have been held. How will the FSA deal with this problem as a whole in the future?
The important thing is that we should deal with illegal acts strictly.
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