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

(Excerpt)

(Monday, June 22, 2015, 10:40 am to 10:53 am)

[Questions and answers]

Q.

I have a question concerning Japan Post. Regarding hikes in caps for Japan Post Bank and Japan Post Insurance, it is being reported that a special mission committee of the Liberal Democratic Party (LDP) has put together a proposed recommendation calling for caps at Japan Post Bank and Japan Post Insurance to be raised to 30 million yen and 20 million yen, respectively, and with regard to Japan Post Bank, the chairmen of the Japanese Bankers Association, Regional Banks Association of Japan, the Second Association of Regional Banks, and the National Association of Shinkin Banks have all expressed opposition to such a move. Minister, could you once again tell us your thoughts on this.

A.

I am aware that the LDP’s special mission committee on postal business is discussing various matters, including raising the deposit cap at Japan Post Bank to 30 million yen, but we have not been made aware that such a recommendation has been put together. In addition, regarding Japan Post Bank, this is nothing more and nothing less than a response to hopes that the bank will contribute to the revitalization of the Japanese economy and the revitalization of regions, establish a business model that will help enable it to be listed on the stock market, and continuously raise its corporate value.

Q.

What are the key points of Japan Post Bank’s continuous growth model?

A.

I think that the arguments going on in Japan right now are odd. Banks lend money, and they can’t lend money unless there are people who want to borrow it. What’s happening with money now? You know how much money banks have and how much the money supply at companies is growing, right? If you don’t know that, you won’t be able to comprehend this at all. Even if the Bank of Japan supplies money to banks, unless commercial banks then supply it to the market, companies will hold vast amounts of reserves. If they use these reserves to fund capital expenditures, bank lending will not expand. So then the question turns to the how the absolute amount of demand for funds from banks compares with deposits, so I think that the business model for banks has changed considerably. That needs to be taken into account. A bank with vast amounts of funds, or deposits, has come into the market, so we need to think about what kind of business they should be asked to pursue. The background to this is the money situation I’ve just described, and the business model for now, where funds are available but demand for them is low, is completely different from the model of the past, when funds were inadequate and demand for them was high.