Press Conference by SUZUKI Shunichi, Minister of Finance and Minister of State for Financial Services

(Excerpt)

(Tuesday, May 9, 2023, 8:45 am to 8:50 am)

Q.

Financial uncertainty is on the rise again owing to the collapse of a US regional bank. I believe that this issue will also be on the agenda at the G7 Finance Ministers and Central Bank Governors’ Meeting beginning on May 11. Would you please tell us your thoughts about the risks in the management of banks in Japan, particularly regional banks? I also assume that regulation and supervision of banks will be on the agenda. Do you think that the regulation and supervision of banks in Japan need to be reviewed?

A.

We recognize that credit uncertainty in the banking sector has not been receded in the United States, as seen in the failure of a regional bank in May. The global interconnectedness of financial markets and economies has led us to be very vigilant about their developments.
Our current assessment is that Japanese financial institutions, including regional banks, generally have ample liquidity and sufficient capital, and that the financial system as a whole remains stable.
In any case, we believe that it is important for financial institutions to strive to secure sufficient liquidity and capital on a daily basis so that credit uncertainty does not arise.
The Financial Services Agency continues to closely monitor the risk management practices of each bank.
On the other hand, as revealed by the recent bank failure in the United States, the environment surrounding the financial sector has changed significantly owing to the development of social media and internet banking, and we recognize that this is a common challenge faced by all countries, including Japan.
I believe that the G7 meeting in Niigata will discuss ways to further strengthen the financial system in light of these environmental changes.
In addition, the Financial Stability Board (FSB) under the Group of 20 and other organizations are scrutinizing the regulatory and supervisory lessons learned from the recent bank failures, taking into account changes in the financial market environment due to technological advances in these years.
Japan, for its part, actively contributes to international discussions, and will appropriately respond domestically by referring to the content of such discussions.