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

(Tuesday, July 8, 2014, 11:02 am to 11:21 am)

[Questions and answers]


Last week, on the 4th, the Financial Services Agency (FSA) released a Financial Monitoring Report for the first time, and the report says that more than 20 percent of regional banks are in the red. Despite the populations of their regions being in decline, regional banks are still declaring their intention to increase lending in their medium-term plans, but there has been harsh comment of this, suggesting that with populations in decline their business models might be unsustainable. Regional revitalization is one of the cornerstones of Abenomics, so what do you think about regional banks, which should be playing the central role in that, receiving such comment? I’d like to hear your views on the situation with regional banks, their business models going forward, and so on.


First, and I’ve said this time and time again, this is basically a management matter, and the management decisions are made by financial institutions. In the case of regional banks, which operate in a certain geographical area, each management decision is made by the regional bank concerned, so this obviously isn’t something you can make sweeping statements about. Having got that straight, population data indicates that the population is in decline, and becoming concentrated in the major cities. This is a negative development for regions, which I think means that regional population decline will accelerate faster than the average rate of population decline. For that reason, when planning for the medium to long term, for ten years ahead, for example, I think the biggest problem is the consequence of this trend. So I would say that the biggest reason for population decline in regions is the lack of work. In that sense, the issue for management is whether to attract companies or more actively pursue business elsewhere. On the other hand, regional banks are also buying up other banks, aren’t they? Looking at that, I think you can see that the bosses of some regional banks are taking decisive action based on that kind of attitude. The results of our monitoring, presented in this report, constitute the results of our examinations of regional banks, our views on issues, and so on, so I think they need to use it as a reference and think about what kinds of financial services they should offer. On the other hand, with regional banks pulling back from lending money to small and medium enterprises (SMEs), we now have the opposite situation, with large banks taking a look at some of the strongest regional SMEs. Large banks, which had completely ignored them before, are now offering standout regional companies loans. That’s a recent trend, isn’t it? And this trend of banks finally trying to lend money to outstanding companies has really become apparent during the last six months.

Site Map

top of page