JBA Submits Opinion on Sale of Investment Trusts at Post Offices to Minister for Financial Services

On June 2, JBA and eight other financial organizations submitted "Our view on the Sale of Investment Trusts at Post Offices" to Minister for Financial Services Takenaka and other related parties.The Government held the Ministerial Meeting for Vitalizing Securities Markets on May 14 and issued "Measures for Reforming and Vitalizing Securities Markets." This document states that said Meeting will deliberate the sale of investment trusts at post offices, and role sharing with the private sector in this field, through the end of fiscal 2003. The opinion paper, which was released on the same day, was drafted to express the opinion of private financial institutions concerning this government initiative.Although we are appreciative of the government's efforts to tackle issues in the securities market at a time of sluggish share prices, the opinion paper clearly opposes the sale of investment trusts at post offices, which are run by Japan Post, a public corporation. Our reasons are outlined below.1. Broadening the scope of businesses conducted by a public corporation may well deprive the private sector of its vitality. This is because the public corporation is sheltered from competition against private financial institutions with privileges given to the public corporation. Moreover, the government may end up "assisting" select companies by actively selling investment trusts of those companies.2. A fundamental reform of Postal Savings must be implemented as soon as possible. This would consist of abolishing or splitting and privatizing the business to place it on a level playing field with private financial institutions. Prior to implementation of this, the corporation should refrain from trespassing the boundary between the public and private sector.