Provisional Translation

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

(Excerpt)

(Friday, December 6, 2019, 9:35 am to 9:44 am)

[Questions and answers:]

Q.

It has been reported that MUFG Bank is considering introducing maintenance fees for accounts. However, when asked some months ago, you said that you do not see any particular trend that introduction of maintenance fees are becoming prevalent in domestic banks. Is it correct to assume that you have changed such viewpoint and think that the harmful effects of negative interest rates on financial institutions are being passed on to the general public?

A.

No, that is not the case. This is a matter concerning inactive accounts, for which a management charge is necessary because they are not being used. Some companies have said that they will start charging a maintenance fee, and that doesn’t mean anything directly regarding the management situation for banks. As we’ve said previously, management is becoming difficult at regional banks in prefectures with decreasing populations in various regions, in accordance with differences in interest rates. This is not an issue that has started just now. A major bank like MUFG wouldn’t have just suddenly woke up now to the reality of low interest rates.

Q.

Mr. Yutaka Harada, Member of the Policy Board at the BOJ, gave a speech yesterday in Oita City, stating that the over accumulation of deposits is a structural problem for banks. He pointed out that over accumulating deposits than loans puts pressure on management. Also, there has been discussion about the need to downsize the number of banks and then the amount of deposit holdings, for the purpose of improving management. Do you think that the number of banks currently in existence is too high?

A.

Are you aware of how many regional banks there are?

Q.

Currently over 100, I believe.

A.

There are 104, and the issue of whether or not there are too many or too few is a topic we’ve been talking about for some time. There are also large second regional banks, credit associations (shinkin banks), and other institutions. Credit associations in the Kansai region are as large as regional banks, and Tokyo’s Johnan Shinkin Bank is large as well. Thinking from that point of view, the number of banks is rather high, and as you know their capacity is also large. Looking at the circumstances for banks at present, capital adequacy ratios are high compared to the early 1990s. In that sense, the reality is that circumstances for banks are exceedingly good. This issue didn’t just begin, but has been going on for 30 years. It sounds like some problems are going on in Oita, but I don’t think so.

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