[Hot Picks from the Financial World]
*   We deliver the hottest information of the times in this section, selected from among questions and answers given at the Minister's press conferences etc. If you wish to find out more, we invite you to visit the “Press Conferences” section of Financial Services Agency’s website.
 
Q:     How will the Investment Services Law change and affect, for example, the world of finance or the financial sector in the future?

A:		  
In the financial sector, banks, life insurance companies, non-life insurance companies, shinkin banks and shinyo-kumiai (credit cooperatives) have their businesses regulated by their respective business laws. The Investment Services Law is undoubtedly a cross-sectional law, but my vision is that its top priority is to prepare against pitfalls that are not expected by investors, and my understanding is that it does not directly regulate the existing financial world.
(from the press conference following a cabinet meeting on Thursday, December 22, 2005)

Q:     The enactment of the “Financial Services Law” was hotly debated around 1999, only to be crushed subsequently as a result of a tug of war between government ministries and agencies. On reflection, what are your views on the fact that it was seven years too late having had discussions of the Investment Services Law?

A:		  
Scams such as those that solicit for investment and promise high rates of interest have actually been around since 1945, and malicious businesses have been punished by applying laws that were effective at the time. It is the demand of the times that a law with universal coverage—that is, an investor protection law -- has become necessary due to the diversification of investment vehicles of late. On the other hand, the law also incorporates the idea that opportunities to make investments freely should not be destroyed by investor protection.
(from the press conference following a cabinet meeting on Thursday, December 22, 2005)

Q:     The Livedoor incident led to the suspension of trading of all stocks at the Tokyo Stock Exchange (TSE) yesterday, and forced the TSE to delay the afternoon session by 30 minutes from today onwards. What is your evaluation of such a measure taken by the TSE?

A:		  
The TSE management should fully acknowledge that a stock exchange deserves to be called a stock exchange only if it can fulfill transactions, and that a stock exchange that cannot fulfill transactions will have the worthiness of its existence questioned. While it is understandable in some aspects that trading was suspended due to abnormal circumstances, they should do everything to improve the reliability and processing capacity of the system in the future. While I have already requested this strongly when the system crashed, I would once again like to urge the TSE management to take proper action in this area.
(from the press conference following a cabinet meeting on Thursday, January 19, 2006)


Minister’s Statement on the matter of the TSE

The TSE is set to take measures including shortening the afternoon trading session by 30 minutes today. This situation is not normal. It is hoped that the situation will be restored back to normal as soon as possible, as it is an urgent issue.
The TSE has been criticized both in Japan and overseas for what has been happening. Restoring confidence in the TSE is crucial to the Japanese economy, and is extremely important for the purpose of restoring the reliability of TSE itself as a stock exchange. TSE must lavishly make investments to improve the reliability and processing capacity of the system, as I have repeatedly stated since the system crashed in November. I intend to strongly inform Mr. Nishimuro of our point of view on this matter.
(from the press conference following a cabinet meeting on Friday, January 20, 2006)

Q:     The TSE has announced a number of countermeasures since the suspension of trading. What is your evaluation of the measures presented by the TSE at this point, to the extent that they have been revealed so far, such as system enhancements and partial restrictions on trading?

A:		  
System enhancements understandably take a certain amount of time, due to the preparation of machines, the development of systems and so on. However, the time taken should be minimized to prepare against this kind of situation.
(from the press conference following a cabinet meeting on Friday, January 20, 2006)

Q:     Sumitomo Mitsui Financial Group announced last Friday that it will execute recapitalization and increase its capital by about 600 billion yen, with the intention of repaying public funds ahead of schedule. What is your evaluation of such a move?

A:		  
Public funds were injected when the entire financial sector was under tough conditions. It is very preferable that they now have an intention to and are able to return the public funds. I hope each financial institution will further restore its soundness after repaying the public funds.
(from the press conference following a cabinet meeting on Tuesday, January 10, 2006)

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