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We give our deepest condolences for people who died in the 2011 Great East Japan Earthquake, and our heartfelt sympathy for the victims who suffered losses.

Financial institutions are taking the following financial measures for disaster victims.

(1) For depositors

• Even for people who have lost their bank deposit book or hanko, if the depositors present documents that make it possible to identify them, the depositors will get access to their deposits at their financial institutions.
• Even if one has lost documents which make it possible to identify them, the financial institutions are striving to provide flexible responses: asking the person's name, address, and other personal information, confirming that these match registered details, then providing access to deposits, etc.
• If family members of deceased or missing immediate relatives provide vital documents, family members can get access to deposits.
• Even if one has been displaced, one can still get access to deposits at financial institutions other than your own

(2) For borrowers

• Financial institutions are working to respond as much as possible when there are requests for grace periods for loan repayments or provisions for stop-gap funds, etc. from borrowers directly and indirectly affected by the disaster.
• Grace periods will be given for non-payment of drafts and cheques which cannot be settled because of the disaster.
• Financial institutions are also working to handle loan applications flexibly and quickly. For example, financial institutions are considering the situation of disaster victims, and will minimize the required documents for submission for loans.

(3) For insurance policy holders

• Life insurance and non-life insurance companies are working on fast and easy procedures of insurance payouts.
• Even if insurance certificates or documents enabling personal identification are lost, there will be flexible responses to each individual customer's situation. If one does not know which insurance company one has policies with, ask an insurance association or any insurance company.
• A customer who is a disaster victim can receive a grace period for insurance premium payments, if requested.

Efforts by financial institutions are supported by the FSA and Local Finance Bureaus, which are also working on public relations activities to provide timely and appropriate information to disaster victims.

As part of public relations activities, the FSA created a Great East Japan Earthquake-Related Information page on its web site. The Status of Financial Institutions, etc. page shows information (including links) on the status of financial institutions in disaster areas, effects of rolling blackouts of Tokyo Electric Power, earthquake disaster response related measures of FSA and Local Finance Bureaus, and financial industry responses. This information is updated daily. (Available in Japanese only)

For details, ask your financial institution, or a financial institution near your current location. (The Financial Institutions Consultation Contact Points List is posted on the FSA web site, which you can refer to) (Available in Japanese only)

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Featured

The FSA published the “Financial Inspection Results Casebook (First Half of 2010 Program Year)“ on February 10, 2011.

Since 2005, from the viewpoint of enhancing transparency and predictability of financial administration, the FSA considers the content and frequency of items pointed out, and summarizes examples for financial institutions to refer to when building appropriate management systems, publishing the “Collection of Examples of Issues Pointed out in Financial Inspections“ each July.

In the 2009 Program Year, considering the situation in which financial institutions are expected to demonstrate a smooth financial intermediary function, the FSA published the “Financial Inspection Findings Casebook for Financial Facilitation“ (43 cases) in December of the 2009 Program Year.

The FSA also publishes an annual “Collection of Examples of Issues Pointed out in Financial Inspections“ in July.

From the viewpoint of promoting enhanced and stronger information delivery, the FSA considers it important to have timely publishing of financial inspection results casebooks (Note 1). This Program Year, for deposit-taking financial institutions, etc., the FSA decided to publish a casebook during the Program Year for the first six months. The FSA has decided to post information on financial institutions other than deposit-taking financial institutions in the next casebook, which it plans to publish in July.

The current casebook focuses on inspection results notified from July to December, 2010, including the “Finance Facilitation Section“ and all risk categories, selecting a wide variety of financial inspection results cases to publish.

The name of the current casebook was changed from “Collection of Examples of Issues Pointed out in Financial Inspections“ to “Financial Inspection Results Casebook.“ This is because many well regarded cases of initiatives for financial facilitation were found. It published 26 assessment cases and 147 individual cases, for a total 173 cases.

The main features of the current casebook are as follows.

(1) To ensure effectiveness of the Act concerning Temporary Measures to Facilitate Financing for SMEs, etc. (Note 2), and for an early start on preparing the Financial Inspection Manual “Finance Facilitation Section“ which was revised at the end of 2009, the FSA began inspections on the situation system preparations for that Act in February 2010. The plan is to execute these inspections for all banks, shinkin banks, and credit unions by around September 2011. This casebook's “Finance Facilitation Section“ shows findings, and many good cases in which performance of financial institutions' consulting functions led to improved performance of SMEs, etc.

(2) In recent inspections of large financial groups, verifications focus on whether it has developed a comprehensive risk management system as an entire group. Especially for “comprehensive risk management systems,“ these verify whether they are aware of the limits of systematic risk measurement techniques, perform stress tests based on forward looking scenarios, use this in business decisions, etc. This casebook shows findings related to “comprehensive risk management systems.“

Note 1: “Efforts for Better Regulation in Financial Inspections (Action Plan II)“ (published May 2009) also includes publishing a casebook biannually.

Note 1: Act concerning Temporary Measures to Facilitate Financing for SMEs, etc. (enforced December 4, 2009)

* For details, please go to the FSA web site and access “Financial Inspection Results Casebook“ published (February 10, 2011) from the Press Releases section (Available in Japanese only). And for past cases, see their Press Releases: 2004 Program Year Edition (July 27, 2005), 2005 Program Year Edition (July 5, 2006), 2006 Program Year Edition (July 5, 2007), 2007 Program Year Edition (July 4, 2008), 2008 Program Year Edition (July 3, 2009), “Financial Inspection Findings Casebook for Financial Facilitation“ (December 17, 2009) and 2009 Program Year Edition (July 21, 2010) (Available in Japanese only).

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Topics

Outline of Monitoring Board

The International Financial Reporting Standards (IFRS) Foundation Monitoring Board was established by the authorities of the USA, Europe, Japan, as an organization of market regulators for monitoring the IFRS Foundation, which is the parent organization of the International Accounting Standards Board (IASB). Its establishment was announced in November 2007, and its first meeting held in April 2009. It has held a total of four meetings since then until October 2010. It has also published statements voiced on accounting standards due process and governance of the international accounting standard setting bodies.

The Monitoring Board currently has the following five members: the Japan FSA Commissioner, US Securities and Exchange Commission (SEC) Chairman, European Commissioner for Internal Market & Services, representative of the Technical Committee (TC) of the International Organization of Securities Commissions (IOSCO), and IOSCO Emerging Markets Committee (EMC) representative. The Basel Committee on Banking Supervision participates in the Monitoring Board as an observer. Mr. Hans Hoogervorst, the Chairman of the Netherlands Authority for the Financial Markets, became a member of the Monitoring Board as the IOSCO TC Vice-Chairman (he became the TC Chairman in June 2010), and served as the first Monitoring Board Chairman. When it was decided in October 2010 to appoint him as an incoming IASB Chairman, he stepped down from his position of Monitoring Board Chairman, and as of March 2011, the Monitoring Board Chairman post was temporarily held by the IOSCO TC Vice-Chairman: FSA's Mr. Masamichi Kono, Vice Commissioner for International Affairs of the Japan FSA.

Background & History of Governance Review

The Monitoring Board held its third meeting in April 2010 at which it was decided to undertake a review of the governance framework around the Monitoring Board and IFRS Foundation. In response, the Governance Review Working Group (Chairman: Mr. Masamichi Kono, Vice Commissioner for International Affairs of the Japan FSA) was established in July 2010 under the Monitoring Board.

The Working Group is performing a study focused on the overall governance structure of the IFRS Foundation, including the composition of the Monitoring Board. A consultative report on governance review was published by the Monitoring Board on February 7. The consultative report contains proposals and questions about the respective responsibilities and roles of the Monitoring Board, Trustees and IASB, and the report seeks comment on opinions from stakeholders. The consultative report will be open for public comment for a period of two months until April 8, during which the Monitoring Board plans to arrange public roundtable meetings with stakeholders in Asia-Oceania (Japan and Malaysia), USA and Europe. An action plan for achieving governance reform based on opinions received in the public comments will be developed and published by early in the third quarter of 2011.

* For details, please go to the FSA web site and access International Financial Reporting Standards (IFRS) Foundation Monitoring Board: Consultative Document on Governance Review published (February 8, 2011) from “International Related Information“ at the Press Releases section. (Available in Japanese only)

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Amidst increasing internationalization of accounting systems, in February 2010, the Small and Medium Enterprise Agency established the “Small and Medium Enterprise Accounting Study Group“ (hereinafter, “Study Group“). In March 2010, private organizations such as the Accounting Standards Board of Japan established the “Unlisted Companies Accounting Standards Roundtable“ (hereinafter, “Roundtable“). Each of these studied accounting of unlisted enterprises, especially small and medium enterprises which comprise the majority of unlisted enterprises.

The Roundtable put together its report in August 2010, and the Study Group put together its report in September. Each of these reports shows directions, such as proposals for new accounting guidelines and new accounting treatments for small and medium enterprises. These also suggest that such guidelines and treatments be largely created by people involved with small and medium enterprises, with related ministries and agencies serving as the secretariat.

This Study Team was established to study specific content such as showing how new accounting treatments for small and medium enterprises should be done, how to implement them widely, and policies for their use in small and medium enterprises. In doing these, the Study Team is to consider the reports of the Roundtable and the Study Group. The Study Team held its first meeting on February 15, 2011. A working group for practical study was established under this Study Team. The first working group was held on February 21, and is performing its study with the aim of summarizing its findings around summer 2011.

The secretariat is being jointly managed by the Small and Medium Enterprise Agency's Finance Division, and the FSA's Corporate Accounting and Disclosure Division.

* For details, please go to the FSA web site and access Small and Medium Enterprise Accounting Study Team (1st) documents (held February 15, 2011) and Small and Medium Enterprise Accounting Study Team Working Group (1st) documents (held February 21, 2011) from the Press Releases section. (Available in Japanese only)

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On February 28, 2011, the FSA put together its partial revision (draft) of the “Comprehensive Guidelines for Supervision of Major Banks, etc.“ and “Comprehensive Guidelines for Supervision of Small- and Medium-Sized Enterprises and Regional Financial Institutions,“ etc.

This revision was made for “Review of customs such as individual guarantors by third parties other than managers“ raised in the “The Action Plan for the New Growth Strategy“ (December 24, 2010 FSA) for the “New Growth Strategy - Blueprint for Revitalizing Japan“ (June 18, 2010 Cabinet Decision).

* For details, please go to the FSA web site and access Partial revision (draft) of “Comprehensive Guidelines for Supervision of Major Banks, etc.“ and “Comprehensive Guidelines for Supervision of Small- and Medium-Sized Enterprises and Regional Financial Institutions,“ etc. published (February 28, 2011) from the Press Releases section. (Available in Japanese only)

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