I have recently taken office as the Governor of the Deposit Insurance Corporation of Japan (DICJ). I will do my utmost from the standpoint of operating Japan’s financial safety net system, so I hope to have your kind support.
Since its establishment in 1971, the DICJ has been responsible for operating a part of the financial safety net system. The deposit insurance system and its management embody some aspects of Japan’s financial history, such as the generation and collapse of the economic bubble during the transition from the Showa Period to the Heisei Period (from the late 1980s to the early 1990s), the subsequent financial crises in Japan and its resolution, and the capital participation into financial institutions intended to strengthen the financial functions after the recent global financial crisis and the Great East Japan Earthquake. During this history, the Jusen Account, which was opened in 1996 at the DICJ, attained all the objectives of the account and was abolished on June 30, 2012 (Jusen, non-bank financial institutions that made mortgage loans, plunged into insolvency in the 1990s). As for the deposit insurance premium rate, which was once set at 0.084%, it was decided at the Policy Board meeting of the DICJ on March 27, 2015, to apply to the Commissioner of the Financial Services Agency and the Minister of Finance for approval to set the rate at 0.042% starting in FY2015. A new page is being turned in the financial history. Another aspect of the financial history is that the DICJ has been playing a certain role in blocking relationships between financial institutions and antisocial forces as well as in recovering property damage suffered by victims of criminal acts, such as bank transfer fraud.
The deposit insurance system and its management are seamlessly intertwined with each other, as is the case with all systems. As for the management of the system itself, I believe high-level government decisions, such as those made by the Financial Crisis Response Council and decisions made by administrative agencies as well as the DICJ’s practical operation are all intertwined seamlessly with each other. Sometimes, a fundamental problem lies in the details. I would like to attach great importance to looking at things with a bird’s-eye view.
Looking back at history, Japan has experienced a series of economic and financial upheavals in the past quarter century. Japan’s financial system is currently viewed as one of the stable systems in the world, and I believe that this evaluation reflects the cumulative effects of the emergency response measures taken by Japan in the past. I think that normal times follow from emergencies and that the reverse might also be true. At this time, when Japan’s financial system is stable, the DICJ will lay the foundation for dealing with future emergencies and develop our response capabilities in accordance with the Japanese proverb, “If you are prepared, you don’t have to worry.”
Moreover, I believe that the viewpoint of adapting to IT (information technology) and globalization is important. As a result of the advance of IT, financial systems have come to be connected with each other in real time on a global scale. The DICJ will strive to develop a system that can respond to changes in the surrounding situation.
As I have already described above, real-time connectivity means instant globalization. The recent global financial crisis has invigorated worldwide debates on measures to deal with the failure resolution of financial institutions and measures to protect depositors. Regarding the deposit insurance system and its management amid globalization, it is important to simultaneously understand the common viewpoints and approaches and recognize the historical and cultural differences between countries. The DICJ will contribute to international cooperation by taking actions that take account of Japan’s past experiences from its standpoint as the operator of the deposit insurance system.
I feel that the situation surrounding Japan’s economy and financial system is constantly changing. I will make every possible effort to ensure that the maintenance of the stability of Japan’s financial system and the improvement of the financial safety net lead to making depositors feel secure and enhancing economic functions. So, I would like to request your kind understanding and cooperation.