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

(Excerpt)

(Friday, April 21, 2023, 9:30 am to 9:41 am)
 

Q.

Some media outlets have reported that a famous coach of a college ekiden team saw his holdings of Credit Suisse AT1 bonds become worthless. I personally suffered a minor loss in investment in the past. So, I was astonished this time, since my investment did not become worthless in the end. Does the Financial Services Agency (FSA) know the total sales of AT1 bonds issued by Credit Suisse in Japan? What do you make of the developments surrounding AT1 bonds. What action will the FSA take?

A.

The FSA estimates the total domestic sales of Credit Suisse AT1 bonds at some 140 billion yen. Their holders are largely corporations and wealthy individuals rather than ordinary investors in Japan.
All in all, it is regrettable such investors suffered.
At any rate, now that write-downs have been made in accordance with a relevant contract clause, it is important that securities firms that sold such bonds respond thoroughly to their clients.
For its part, the FSA intends to appropriately monitor how securities firms deal with their clients.

Q.

I have a question in relation to Credit Suisse as mentioned earlier, or rather the financial regulations. You said in previous press conferences that deposit withdrawals can be made at an astonishing speed with the combination of internet banking and information sharing via social media, as they were actually made including Credit Suisse. You added that the FSA keeps a close watch on such withdrawals. Some time has passed since the crisis. And the G7 Finance Ministers meeting will be held next month. Do you have any thoughts on, say, what financial regulations should look like in the age of social media and internet banking?

A.

At the latest G20 meeting, I also called attention to the need for discussions toward enhancing the financial system in the face of major changes in the environment surrounding financial markets brought about by the development of social media and internet banking. That was what I told the press conference after the G20 meeting.
The situation has settled down; it will remain stable at least for the time being. And yet, a financial crisis can happen. Under such circumstances, we must continue to keep a close eye on these environmental changes and respond to them.
No decision has been made as to whether and how the upcoming G7 meeting in Niigata will deal with this issue. If this issue is raised at the meeting, the participants should deepen discussions about it, and it should be discussed in each member country.