Press Conference by Taro Aso, Deputy Prime Minister, Minister of Finance and Minister for Financial Services

(Excerpt)

(Tuesday, February 5, 2013, from 10:57 a.m. to 11:13 a.m.)

[Opening Remarks]

I will explain about talks on the Financial Services Agency’s (FSA’s) activities in all prefectures. Although the Small and Medium-Size Enterprise (SME) Financing Facilitation Act will expire at the end of March, there will be no change in our stance on inspection and supervision or the definition of non-performing loans, as we have already stated. We will continue to encourage financial institutions to make such efforts as modifying the terms of loans, ensuring smooth provision of funds, proposing solutions best suited to individual borrowing companies’ circumstances and providing support. On the other hand, while I believe that awareness of these measures and policy has grown considerably, I think that further efforts should be made to ensure widespread awareness, mainly among small businesses. Therefore, the FSA will dispatch its senior officials, including Senior Vice Minister Terada, Parliamentary Secretary Shimajiri and the FSA Commissioner, to all prefectures in February and March, and we will make renewed efforts to ensure that financial institutions are aware of the policy that I mentioned at the beginning and provide detailed explanations once again to officials of borrower companies so that we can properly deal with the situation after the expiration of the SME Financing Facilitation Act. We would also like to use this occasion to hear the opinions of people on the frontlines that may not reach us in Kasumigaseki.

The next subject is active use of ABL, or asset-based lending and quasi-capital loans. The emergency economic package that was determined by the cabinet on January 11 calls for promoting the use of asset-based lending, known as ABL, which refers to loans collateralized by movable property and accounts receivable, as a measure to support the improvement of SMEs’ business management and fund-raising. This is not something new. In response, regarding movable property and accounts receivable as collateral, the FSA will today clarify the criteria for eligibility as ordinary collateral as defined in the Financial Inspection Manual. The FSA has already been promoting the use of quasi-capital loans as a measure to support the improvement of SMEs’ business management. The FSA will also make it clear in what cases financial institutions are allowed to treat quasi-capital loans as losses for tax purposes. Through these actions, the FSA will promote further use of ABL and quasi-capital loans by financial institutions and support SMEs in improvement of business management and fund-raising.

[Questions and Answers]

Q.

Regarding the FSA’s examination of applications for new services by Japan Post Insurance and Japan Post Bank of Japan Post Group, could you tell me about the current status of the examination and about your expectation as to whether approval will be granted in time for the new services’ originally scheduled starting date of April? The other day, Chairman Nishimuro of the postal privatization committee offered his view that the starting date for Japan Post Insurance’s new service, specifically education insurance, will probably be moved back somewhat. Could you offer your view on approval and the starting date, including with regard to Japan Post Bank’s new service?

A.

I am aware of the media report which you mentioned: the report that the date will be moved back. Frankly speaking, as we are already into February and are still examining the applications, I sense that it will be difficult for either Japan Post Insurance or Japan Post Bank to start the new services in April. Regarding both of them, we need to continue examining their applications properly.

(End)