VI. Points to be Considered in Promoting Reform

(1) In the previous financial system reform, there was some criticism that not all financial institutions independently reformed their management. Therefore, to speed up the liberalization, and to drastically reform the system for the benefit of users, it is very important to specify the schedule of reform toward the year 2001, and to implement it. In implementing the reform, it should be noted that the revision of the Foreign Exchange and Foreign Trade Law will take effect in April 1998.

(2) However, in promoting the reform, on the one hand, it is necessary to pay careful attention to avoid harming the financial system's stability. For this, there should be maximum use of the previously established three financial acts. Simultaneously, it is hoped that consideration will be advanced to continuously develop measures for the financial system's stability.

(3) The systems of Postal Savings and other public financial institutions must continuously be reexamined to meet economic and social change. Considering the aim of this financial system reform, discussions should proceed from the perspective of having thorough market discipline. However, as this issue goes beyond the sphere of the financial system, it is difficult to discuss only in the FSRC. Rather, the FSRC should concentrate its discussion on resolving the imminent problems in the private sector and giving priority to the vitalization of the financial market.

Currently, this issue is being discussed in the Administrative Reform Conference, an institution directly under the Prime Minister. The system and management of the Treasury Investment and Loan Program has also being discussed in a committee under the Fund Operation Council since February 1997. We expect that discussions in the above institutions, as well as that held in other places, will make further progress.

(4) This financial system reform, scheduled to be implemented by 2001, consists of urgent matters surrounding the current condition of Japan's financial sector. Revision of plans and additional measures may be necessary in line with further developments in information technology or the sophistication of financial functions.


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