Ad Hoc Press Conference by ASO Taro, Deputy Prime Minister, Minister of Finance, and Minister of State for Financial Services
(Friday, March 6, 2020, 6:45 pm to 6:54 pm)
On February 7, we requested that public and private sector financial institutions take timely, appropriate considerations and other measures for financing. Following that, we created emergency loans and a guarantee framework of 500 billion yen through the Japan Finance Corporation and others. However, since then many business operators have expressed concern regarding funding. With the busy period that accompanies the end of the fiscal year approaching, we must not allow any serious impediments to financing for business operators to occur. Today we are once again requesting that financial institutions be thorough in providing adequate responses in accordance with the actual situations that business operators are facing. The FSA places high priority on the promotion of efforts to support business operators, namely the promotion of funding in its inspections and supervision of private financial institutions. In particular, we will conduct hearings and make timely, appropriate confirmations in accordance. Furthermore, we will ask private financial institutions to modify lending conditions, such as by lowering interest rates, or allowing for the five-month repayment amount to be stretched over ten months, and make public the state of those changes. To promote appropriate efforts at private sector financial institutions, the environment must be improved. In that regard, we are asking governmental financial institutions and related organizations to carry out the same initiatives. On March 1, the Prime Minster stated his intent to take forceful measures in consideration of the impact on regional economies, starting with strong support for financing. Therefore, we plan to quickly formulate and carry out a second package of emergency measures that include funding support. We plan to implement it on Tuesday the 10th of next week. To put it simply, we are asking financial institutions to visit business operators, rather than waiting for them to come. That could be called a business operator visit. We’re asking that they do it quickly, or that a desk for emergency consultations be set up. Financial institutions should take such measures, starting by clearly understanding the actual situation. Then, regarding how much the annual interest rate will be, 1% or 2%, we ask that they modify the conditions for postponing repayment, such as allowing two years to repay a loan that was originally to be repaid within one year. We ask that financial institutions respond flexibly in modifying the conditions, such as in cases where a borrower asks that a monthly loan repayment of 50,000 yen be lowered to 25,000 every month. Regarding new loans, we ask that financial institutions take a stance of quickly and thoroughly providing support for business operators because the end of the fiscal year is arriving. Financial institutions must assertively carry out the emergency financing system of each institution, and in addition to this, quickly and appropriately respond to the currently necessary items in accordance with the requests of business operators, including using the safety net loans and safety net guarantees of governmental financial institutions and the Credit Guarantee Association. Generally, having financial institutions carry this out thoroughly, they would request a large amount of documentation, but we will proceed without documentation. This is because there is no time for such documentation in the current situation. This does not mean that there will be no documents at all, but there will not be the usual excessively high number thereof. Such documentation would cause the measures to be too late. So we are repeatedly asking for the financial institutions to not ask for too many documents. In conclusion, we ask financial institutions to provide assertive support for business operators based on these requests, and the FSA will follow up on the situation.
[Questions and answers:]
Last month, you made a request for financing from financial institutions. Now you are making that request again. Is this because the situation has changed somewhat?
I’m not saying that the situation has changed, but we’ve still received many telephone consultations regarding financing, despite the fact that we have announced that financial support will be provided. If we’re hearing such opinions, we have no choice but to think support is not being carried out in a thorough enough manner. The government is saying that it will make all-out efforts, but financial institutions are looking hesitant. There must be an answer somewhere to why they are being hesitant to act. They have to do this now. That’s why we’re once again asking that they do this, and for example, we’ll look at it later. We’ll know if nothing has changed as soon as we start to inspect, and we’ll look at that. Why do they need so many documents? There’s no reason why a financial institution needs another copy of the same document from a company they’ve been doing close business with up until now. For small to medium enterprises, it’s extremely difficult to get all those documents out. By doing those kind of things, even if they decide on rules, there’s no way to arrive at a good result if they don’t understand the needs of the borrower, and the lender doesn’t understand the strain of the situation. That’s why we’re asking financial institutions to take these measures.
You stated that you are asking that financial institutions respond flexibly in modifying the conditions, such as the postponement of repayment. Is this the same as the postponement of repayment carried out by the former administration of The Democratic Party of Japan?
We will not carry out debt cancellation. Do not confuse this with that matter.
This is a different matter?
We’re basically asking financial institutions to be flexible with those kinds of modifications. There are going to be many issues coming up, such as how to deal with freelancers. Those will have to be dealt with separately. They may think, “Regular employees may be able to do it, but what should we do?” So, we want them to include freelancers. Please ask the office staff for the specifics.
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