Press Conference by Taro Aso, Deputy Prime Minister, Minister of Finance, and Minister of State for Financial Services
(Friday, July 4, 2014, 11:36 am to 12:05pm)
At today’s Cabinet meeting, the Cabinet approved changes in senior officials at the Ministry of Finance and Financial Services Agency.
Changes in personnel at or above the bureau director-general level are as follows: First, Ryutaro Hatanaka will leave his post as Commissioner of the Financial Services Agency (FSA) and be replaced by Kiyoshi Hosomizo, currently Director-General of the Supervisory Bureau. Mr. Hosomizo’s successor as Director-General of the Supervisory Bureau will be Nobuchika Mori, currently Director-General of the Inspection Bureau, while Mr. Mori’s successor as Director-General of the Inspection Bureau will be Toshihide Endo, currently a Deputy Director-General of the Planning and Coordination Bureau. Shigehiro Kuwabara will also leave his post as Director-General
of the Planning and Coordination Bureau and be replaced by Yuichi Ikeda, currently a Deputy Director-General of the Supervisory Bureau. Masamichi Kono, Vice Commissioner for International Affairs, Hidenori Mitsui, Vice Commissioner for Policy Coordination, and Yasuhito Omori, Secretary-General of the Securities and Exchange Surveillance Commission will all retain their posts. To foster exchanges with other ministries and agencies, the FSA has traditionally accepted three officials at the Deputy Director-General and Deputy Secretary-General level from other ministries and agencies, and will continue this policy. In addition, regarding new promotions to senior posts, the appointment of Naoki Nishita, currently Director of the Supervisory Bureau’s Supervisory Coordination Division, to a Deputy Director-General of the Supervisory Bureau marks the first time that an employee of a local finance bureau has been promoted to this post. This appointment was made based on his abilities and track record.
[Questions and answers]
Please tell us about the personnel changes at the FSA. I’d like to ask about the aims of and expectations concerning the promotion of Mr. Hosomizo to Commissioner. Things are going smoothly at the moment, but regarding a direction for financial administration, you’ve long talked about how the FSA should become a “Financial Nurturing Agency,” so please tell us whether things are going to continue in that direction, whether you will be asking the FSA to maintain that direction going forward, and so on.
There had been a lot of financial scandals, and given its financial supervision and inspection functions, I think that the FSA was sort of becoming the “Financial Punishment Agency.” During the period of deflation, I think such behavior might have been more visible, but now, to ensure that the government can improve the economy, we need to increase lending by banks. No matter how much money the Bank of Japan supplies to banks, the portion of the money supply that is supposed to be supplied by them to the market just sits there with them, and their current account balances at the Bank of Japan just increase. Unless the money in those current accounts leaves the banks and reaches individuals and corporations, the money will not circulate, so unless we move in a direction that makes it easier for the money to get out, the economy is unlikely to improve. There were a lot of scholars who said that if the Bank of Japan relaxed its monetary policy and just printed yen, the economy would somehow improve. But it didn’t. What matters is how we can ensure that money goes beyond the banks. Even if the FSA, as the supervisor, keeps asking “Are you OK, are you OK,” problems occur, and there was a period in which too much importance was attached to obtaining land as collateral before lending. In Japan, there was a period in which there was a “land myth,” a belief that land prices would normally continue to increase. So the thinking was that as long as you took land as collateral, you could always seize it and sell it, and somehow get your money back. But that period is gone, so basically the FSA also needs to conduct supervision in such a way as to ensure that banks also lend money based on business plans, the nature of the business the borrower is trying to conduct, the nature of the people involved, and so on. In January of last year I said that banks had to stop complaining when there isn’t enough collateral. That’s the direction we’re moving in, and I want you to know that this direction won’t change with the appointment of Mr. Hosomizo as Commissioner.
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