Provisional Translation

Q.

The JFSA policy assessment and strategic priorities report published on August 28 includes a large amount of content relating to improving earnings at regional financial institutions. As local economies will face a negative impact if regional financial institutions cannot improve their operations, I’d like to ask for your opinion and thoughts on the current situation.

A.

This isn’t a new development. We’ve been highlighting the issue for some time. In addition to the declining population, there are disparities between regions, and differences between industries. The movement of the economy to this point has been based on the premise that those without money will seek to borrow it. While this is the case with an economic study, the reality is that people are not borrowing even where there is money, and borrowers cannot be increased even by lowering the interest rate. There are no economics books that are written based on such a premise. It is illogical to lower interest rates if money is rapidly increasing and loans are increasing. You can ask for an explanation, but there’s no one who could provide one.In such a situation, there won’t be a profit margin for earnings from interest rates if regional financial institutions carry on as they have until now, making management difficult. That much is obvious, and we have continuously said that we need to think about what to do in response, and that the situation is becoming difficult for regional banks. While there have been a variety of actions taken in response to this issue, there has not been much progress made. So we have continued to make many different suggestions and proposals before the situation becomes too unfavorable, which would have multiple large impacts on your local economy. Even with many suggestions, however, a lack of motivation would cause difficulties, but if regional financial institutions go bankrupt, the situation will certainly be unfavorable. So, that’s why we released the policy assessment and strategic priorities report. How it will be received, and responded to, is up to the individual financial institutions.

Q.

Today, requests for budgets and tax system reform requests were issued by each Ministry. The FSA, for the purpose of supporting asset building, requested that the Tsumitate NISA (Dollar-Cost Averaging NISA) plan be made permanent. The report that outlined the necessity for 20 million yen in old age was supposedly to aggravate this argument, but, toward the year end, are you considering remaking the report?

A.

At the current stage we have no intention to remake such report.