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

(Excerpt)

(Friday, June 21, 2024, 10:01 am to 10:10 am)

Q.

I would like to ask for your opinion as the minister in charge of financial services. Jimoto Holdings, Inc. in Sendai City was placed substantially under state control at its general shareholders meeting held yesterday. What do you think of this extraordinary situation? From now on, how will the government get involved in the management of the bank, including the appointment of top-level executives? Additionally, please explain the status of deliberations regarding the collection of public funds injected in the past.

A.

Through the general shareholders meeting of Jimoto Holdings, Inc. held yesterday, the government came to temporarily hold voting rights of the bank, but there were similar cases in the past as well.
The Financial Services Agency (FSA) considers it is important for Jimoto Holdings, Inc. to make steady efforts to secure financial resources to repay public funds it had received by implementing measures to increase revenues for management reconstruction, while strongly supporting local companies and sufficiently fulfilling its financial intermediary function in relevant regions.
Regarding the government's involvement in the bank's management as a shareholder, the government will exercise its voting rights properly based on the basic idea on shareholders' exercise of voting rights published by the Deposit Insurance Corporation of Japan, from such perspective as whether it will surely contribute to the maintenance of the soundness of the bank's business, and whether it will be helpful for the bank to secure financial resources to repay public funds. Regarding executive appointment as well, the government will decide on the exercise of its voting rights from such perspective.
As for the deadline for the repayment of public funds, which was scheduled in this September, the FSA and Jimoto Holdings, Inc. are now discussing a duration for repayment deferral. As the details of the process are now under discussion, I will refrain from making any comments.

Q.

I will ask you about the issue concerning the Norinchukin Bank. The bank made a huge loss due to failures in investments in foreign bonds and now faces the need for capital increase of around 1.2 trillion yen. Since when has the FSA ascertained a risk associated with the bank's investments in foreign bonds, and does the FSA have any plan to take actions, such as the strengthening of monitoring of the bank?

A.

I would like you to understand that the FSA ascertained the relevant risk at a timing administratively reasonable.
This is an issue regarding account settlement or the like of the Norinchukin Bank, an individual financial institution. Therefore, I will refrain from making any comments. However, I understand that interest-rate hikes in the United States and other countries will also exert a certain impact on the Norinchukin Bank, but the bank still holds sufficient equity capital exceeding the regulatory standard and I evaluate that the bank's financial soundness is being secured.
On the other hand, trends in the economic and financial markets surrounding financial institutions, including changes in interest rates in and outside Japan, remain fluctuating, I think. The FSA will endeavor to properly ascertain influences of such fluctuating trends on the Norinchukin Bank, in collaboration with the Ministry of Agriculture, Forestry and Fisheries, and will continue requesting the bank to develop an appropriate risk management system.

Q.

There was media coverage that the FSA will issue a business improvement order to MUFG Bank, Ltd. as early as next week. Could you explain the current situation? 

A.

I know that there was media coverage on the issuance of a business improvement order as early as next week, but the FSA has not made any decisions on the timing of the administrative action as of now.
We would like to proceed with the procedures and decide on concrete details of the action.