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

(Excerpt)

(Tuesday, October 13, 2015, 10:49 am to 11:06 am)

[Questions and answers:]

Q.

Minister Aso, you have stayed in the Cabinet following the reshuffle, and I therefore expect you to remain the key person in the determination of economic and fiscal policy, but may I ask what your aspirations are for this new beginning?

A.

Regarding financial services, I think that the situation has been changing dramatically these days in various ways. Companies have all this money, and mean that they have no desire to borrow money. Companies have painful experiences of the past, when banks refused to grant them new loans or demanded repayment of existing loans for a long period of time. They basically want to get by on their retained earnings, and it’s natural for them to think that way. In that sense, it’s a big mistake to think that financial services is the same as it was before, and that if you just sit and wait, people will come to you to borrow money. I think a lot of people have come to notice that. We in the Financial Services Agency are also not currently faced with the kind of crisis we did following the collapse of Lehman Brothers or the 1997 Asian currency crisis, when banks were going bust. I therefore think we have to consider the financial system as a whole. For example, how financial services should adapt over the long term to population decline. When thinking about sustainable economic growth, various expressions come up, such as the fair allocation of funds, and I think we have to think about things like that.

Q.

Just now, when you were discussing the tasks for the Financial Services Agency following your reappointment as Minister, you mentioned that you needed to think about adapting financial servies to population decline, but would you mind elaborating on that a little more?

A.

Basically, I have no plans to say this or that about the situation with regional banks and secondary regional banks, but I will say that of the population declines, business will obviously become more difficult for them. If the population declines, things are going to get really tough, and the banks that recognize this are merging with each other, aren’t they? That’s what it looks like to me. So there will obviously be differences from region to region, and the approaches of top management will also differ, so we have no plans to step in. So I think they should think things through for themselves, but financial services is now less about lending money to places that don’t have it. At the moment there’s a surplus of money, so if there’s a surplus, that money should be used to create demand because there’s currently a lack of demand. I think that banks need to adopt various approaches, such as using their knowledge to think more about creating that demand. That’s how it looks to me.

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