Financial Associations Issue Opinion on Launch of Japan Post

On April 1, 2003, the day the Japan Post was launched, the Central Liaison Council of Financial Organizations concerning Postal Savings/Postal Insurance Issues, whose membership consists of JBA and ten other trade groups, issued "Our Opinion at the Launch of the 'Japan Post.'"The Council drafted "Our Opinion on Postal Services' Transformation into a Public Corporation" in November 2001, in which it stressed the necessity for fundamental overhauls of the postal savings/postal insurance businesses. Unfortunately, almost none of these opinions were heeded and privileges of state-run enterprises such as governmental guarantees and tax exemptions have been left intact. Consequently, the new body has inherited unsolved problems such as placing a burden on taxpayers and interference with monetary/capital markets.Within these developments, "Our (present) Opinion" of this time reiterated the following three points.1. The postal savings/postal insurance businesses, which were transferred to the Japan Post with the privileges of a state-run business intact, must be abolished or privatized after being split for the interest of the national economy. This is essential due to the principle of "Let the private sector do what the private sector can do." This requires a level playing field with private financial institutions.2. As long as the Japan Post runs these businesses, the scope of business should be frozen to prevent the state-run business from encroaching into the sphere of private enterprise. In addition, the business scale should be curtailed by reducing deposit/subscription limits in respect to the original objective of the business.3. The government is kindly requested to draft, as soon as possible, a concrete schedule for the overall reform of postal services run by the Japan Post, and indicate the schedule (e.g. 1 year) for drafting a basic reform policy. Moreover, a third party organization comprised of members from the private sector should be established to formulate the basic reform policy.