(Introduction)
I am Shozaburo Jimi, Minister of State for Financial Services. I appreciate your continued support and encouragement.
Today, I would like to state my thoughts on the current financial administration.
(Reconstruction from the Great East Japan Earthquake)
It is nearly one year since the Great East Japan Earthquake occurred. This year is important as the first year of full-blown recovery from that disaster, so the government and the public sector must work together to do their utmost to steadily carry out full-fledged recovery work in the disaster-stricken areas.
The Financial Services Agency (FSA) will continue to take every possible effort to support the recovery of the disaster-stricken areas, for example by encouraging financial institutions and other organizations to make effective use of various recovery support measures, such as the (amended) Act on Special Measures for Strengthening Financial Functions, which includes special treatment for the victims of the earthquake and tsunami disaster, and the Guidelines of Workout for Restructuring Debt Owed by Individual Debtors, so as to ensure that the financial sector firmly supports efforts toward the recovery.
(Current Situation surrounding Japan's Financial System)
Next, I will explain the current situation surrounding Japan's financial system.
The environment surrounding small and medium-size enterprises (SMEs) and financial institutions continues to be harsh against the backdrop of the European sovereign debt crisis, over which uncertainty is still hanging, and the yen's historic strength, among other factors.
In this situation, the FSA will take appropriate actions so as to ensure the soundness of the financial system and the smooth and active exercise of the financial intermediary function.
(Facilitation of Financing)
Now, I will talk about the facilitation of financing.
In light of the basic role of financing, which is to support the real economy, financial institutions are required to aptly meet client companies' fund needs and also provide maximum support for the improvement of their management by actively exercising the consulting function.
In order to ensure that financial institutions properly perform their above-mentioned role, the FSA has taken various measures to facilitate financing, including the enforcement of the SME Financing Facilitation Act.
While I believe that efforts to facilitate financing have been taking root as a result of those measures, some problems have also been pointed out. Among the problems are an increase in the re-modification of the loan terms and the presence of SMEs that have not drawn up business improvement plans after being granted modification of their loan terms. Therefore, it is necessary to ensure financial discipline and also aggressively promote management improvement support for SMEs in the true sense of the words as an “exit strategy,” so I have concluded that it is appropriate to extend the period of the SME Financing Facilitation Act for one year again for the last time so as to promote a smooth shift in emphasis to support for business rehabilitation.
(Global Financial Regulatory Reform)
Next, allow me to mention developments related to global financial regulatory reform.
From the perspective of strengthening the global financial system, international agreements have been reached, including one on the new regulatory framework of bank capital and one on a comprehensive policy package concerning systemically important financial institutions at the Cannes Summit that was held in November 2011. In addition, various other measures, including the reform of the over-the-counter derivatives market, are being implemented.
Japan will continue to actively participate in international debates on such matters and cooperate with other countries.
(Key Points of New Bills)
Finally, I would like to explain the key points of the new bills that we will submit to the Diet.
We plan to ask you to deliberate four bills in the current Diet session.
Let me explain the key points of the bills that have already been submitted to the Diet.
The first of those bills is the bill to partially amend the Act on Extraordinary Measures for Facilitating Financing for SMEs, which extends the period of the SME Financing Facilitation Act for one year again, as I explained earlier.
The second is the bill to partially amend the Act on Limitation on Shareholding by Banks and Other Financial Institutions. It extends for five years the period of purchase of stocks by Banks' Shareholding Purchase Corporation from banks, which is scheduled to expire at the end of March 2012.
The third is the bill to partially amend the Insurance Business Act, etc. This bill extends for five years the period of government subsidies for Life Insurance Policyholders Protection Corporation of Japan, which is scheduled to expire at the end of March 2012, and relaxes regulations concerning the scope of business operations of insurance companies' subsidiaries and the transfer of insurance policies.
In addition to these three bills, we plan to submit the bill to partially amend the Financial Instruments and Exchange Act. This bill includes provisions for: improvement of institutional systems concerning the regulation of over-the-counter derivatives transactions and insider trading regulation related to corporate reorganization; revision of the monetary fine system; and rules on the establishment of a comprehensive exchange, subject to the consent of relevant parties.
It is essential that these bills be enacted as early as possible so that necessary measures can be taken promptly. I would like to ask you to deliberate and approve them.
(Conclusion)
I have stated some of my ideas as the Minister of State for Financial Services. I am resolved to continue to do my best in financial administration management with your kind support. I would appreciate the understanding and cooperation of Chairman Kaieda and all the other members of this Committee.