[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.
''Hot Picks from the Financial World'' for this month feature an excerpt of finance-related statements made at the inaugural press conference by Mr. Yuji Yamamoto, who assumed office as Minister for Financial Services on September 26.
If you wish to find out more, we invite you to visit the ''Press Conferences'' section of Financial Services Agency's website.
 
[Opening Statement at Inaugural Press Conference by Yuji Yamamoto, new Minister for Financial Services]
    Let me first talk about the Prime Minister's orders I have been given. In regards to financial services, one of his orders was to reform the system of moneylending businesses to curb and provide a remedy for multiple debts. He also urged me to develop and implement a framework that enables people to use financial instruments with a sense of security, including properly implementing the Financial Instruments and Exchange Law. He also instructed me to make comprehensive efforts, including making enhancements to market surveillance functions aimed at strictly enforcing market discipline, while developing an environment adapted to globalization in order to turn Tokyo into a global financial center through such means as aggressive deregulation and construction of a world-class stock exchange system.
In regards to ''re-challenge'' or second-chance programs, he asked me to make policy efforts to create a society that does not lock in winners and losers but offers diverse options to people in each stage of their lives. Especially in regards to supportive measures, he ordered me to consider building a flexible and diverse social framework that enables people have another go, creating diverse work styles, schooling and life styles, and working out supportive measures according to individual circumstances.
I am committed to fulfilling both of these responsibilities as hoped by the Prime Minister by making thoroughgoing efforts.
 
Q.     In regards to the bill for the amendment of the Moneylending Control Law, what is your stance, commitment or views you previously held with respect to the industry?

A.		  
Looking at the interest rates and the circumstances under the existing Law Concerning the Regulation of Receiving of Capital Subscription, Deposits and Interest on Deposits, the amendment makes the Law much stricter compared to the current standards. While I acknowledge that there are proposals to make it even stricter, we need to look for the optimal point where our society will have no people with multiple debts and at the same time, meet the needs of people who require credit based on trends. It is not a matter of whether it is better to be strict or lax: we need to have a highly discerning eye to look at the times, so we hope to work on finding the optimal point while listening to various people's opinions.
 
Q.     There have been some claims from a long time ago that Japan is overcrowded with banks. What is your view on this, especially with respect to regional banks?

A.		  
The specific circumstances of each region, the status of the borrower and the needs for financial services vary widely, so one cannot categorically claim that it is overcrowded with banks, or argue what would be the appropriate number or size of banks. The financial sector is merely a lubricant, corresponding to the bloodstream in the human body. Regardless of whether it is overcrowded with banks, companies can be invigorated and the economy can be boosted through the allocation of funds required to meet demand. Categorically arguing that it is overcrowded with banks might give rise to circumstances similar to the one faced by Hokkaido after the collapse of Hokkaido Takushoku Bank, so we would like to address this matter carefully.
(from the inaugural press conference on Tuesday, September 26, 2006)
  
Q.     What kind of management principles and objectives are deemed appropriate for the acquirer of Ashikaga Bank?

A.		  
Firstly, what matters the most is to make it function as a bank and as a financial institution, so it is important that the acquirer has a management team with appropriate management principles, in addition to capital enhancement.
Furthermore, as Ashikaga Bank is a regional bank in charge of Tochigi Prefecture's economy, the acquirer should truly care about the regional economy and be willing to share its fate with the regional economy, rather than just pursuing the logic of capitalism.
(from the press conference following a cabinet meeting on Friday, September 1, 2006)
 
Q.     the working group is deemed to play a central role in taking up the requests of the locals in the future, but how exactly is it going to be done? Secondly, there are some concerns among locals about members of the working group not necessarily being knowledgeable of Tochigi Prefecture's economy. What are your thoughts on this?

A.		  
The working group will, as a matter of course, look into specific information, including the selection process. As this includes proposals made by private businesses, the deliberation and screening processes should be limited to members of the working group as a general rule.
However, we will of course conduct interviews as well, so we intend to carefully listen to the opinions of the governor of Tochigi Prefecture, the local business community, the council and other interested parties.
(from the press conference following a cabinet meeting on Friday, September 1, 2006)
 
Q.     What is your view on the impact of the problems raised by Mr. Gotoda you just mentioned on the current issue concerning the revision of moneylending business regulations?

A.		  
The FSA's draft bill must accurately reflect the opinions of the Round Table Conference on Money-lending Business established under Director-General Mr. Mikuniya. Strenuous efforts were also made to prepare a draft that accurately reflects the approaches taken by LDP's Research Commission on the Finance and Banking Systems and the New Komeito. As a matter of course, we held meetings with key members of the ruling parties in the process and consequently produced a draft in accordance with the suggestions of both parties. With respect to sensitive areas, we made proposals with footnotes stating ''this is an idea''. The fact that this has become a subject of debate should be welcomed.
(from the press conference following a cabinet meeting on Friday, September 8, 2006)
  
Q.     Upon his resignation, Mr. Gotoda repeatedly stated that the latest draft was compiled while ignoring your opposition to the preferential measures. What is your opinion on this?

A.		  
I have talked about the preferential measures probably twice at an open forum. I stated at the Round Table Conference that it would be a problem if an exception became a non-exception, that is, if a clause for an exception is created to survive permanently. It is no good to make a permanent system instead of a provisional, interim preferential measure. At the Round Table Conference, I indicated that it must purely be provisional.
In addition, I stated at a press conference here that if the system is to be changed, measures to alleviate radical change must be taken and interested parties must be allowed to make a ''soft landing'', so the FSA's draft is in agreement with what I have in mind.
(from the press conference following a cabinet meeting on Friday, September 8, 2006)
  
Q.     There are criticisms against the FSA that the preferential measures set forth in the FSA's draft might be aimed at protecting moneylenders. What is your view on this?

A.		  
The FSA presented the best draft it could in accordance with the LDP's report and the Round Table Conference's interim report. What we have presented was an idea, so it is the LDP's job to determine what to do with it.
(from the press conference following a cabinet meeting on Tuesday, September 12, 2006)
  
Q.     What are your thoughts on nighttime stock trading?

A.		  
Nighttime trading of stocks will undoubtedly be convenient for investors. Especially for individuals engaged in work during the day who want to carry out investment activities at night, I can imagine that it would be extremely convenient for them to be liberated from the existing time constraints. On the other hand, the market and the trading volume in nighttime trading is extremely small compared to the likes of Tokyo Stock Exchange (TSE) and Osaka Securities Exchange (OSE), so it is necessary to carefully monitor whether prices are formed in a fair manner at all times. Due to the small market size, acts in violation of the Securities and Exchange Law are more likely to occur, such as insider trading and market manipulation. Market operators and the FSA must pay considerable attention to this.
(from the press conference following a cabinet meeting on Friday, September 15, 2006)
 
Q.     What are your views on the FSA's role in imposing financial sanctions against North Korea?

A.		  
The FSA has two roles: the first is customer identification. This is partly to prevent other people's names or fake names from being used in transactions in order to fight terrorist financing, but first and foremost, banks are responsible to confirm the identity of the person for bank transactions, tax affairs and other such matters.
The latest measure requires that the ID of customers be properly checked in such cases involving remittance. If the ID of the holder of a bank account has been checked in advance, customer identification is not needed for the remittance of funds withdrawn from such a bank account because it has already been done. Nonetheless, the FSA is urging financial institutions to properly check the ID of customers. This is one of FSA's roles.
In addition, the Organized Crime Punishment Law stipulates that if a bank acknowledges suspicious transactions, the bank must confirm certain facts and file a report on such transactions. The FSA's other big job, which relates to proceeds of crime, is to request financial institutions to closely monitor such suspicious transactions.
(from the press conference following a cabinet meeting on Tuesday, September 19, 2006)
  
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