Key points of JBA Views on Privatization of Postal Services and the Future of Postal Savings

The Council on Economic and Fiscal Policy is presently deliberating privatization of the Postal Services as one of the central issues of the government. Perceiving this to be the optimal time for banks to clearly advocate the desirable form of privatization, JBA drafted "Privatization of Postal Services and Future Postal Savings (Key Points)" at the Board of Directors Meeting held on December 24.

JBA proposed the followings in the Key Points.

(1) Halting acceptance of time deposits such as "Teigaku Savings."

(2) Transferring existing "Teigaku Savings" into a special resolution account, together with corresponding assets.

(3) Characterizing the reformed postal savings (Post Bank) as "a narrow bank," which takes ordinary savings, invests its funds in safe assets such as government bonds, and thus provides a payment/settlement function. Having the Post Bank sell government bonds and financial products of private financial institutions, using the post office network.

(4) Abolishing privileges of a governmental business held by the Post Bank (removing the governmental guarantee, obligating it to join the deposit insurance system and pay taxes and introducing the same regulations and supervision as private financial institutions); and implementing appropriate regional splits.

(5) Streamlining personnel and the post office network after a preparatory period of no longer than ten years, and subsidizing it with profits from the special resolution account.

These Key Points are not only based on views and papers JBA released in the past, but takes full consideration of the five principles presented by Minister Takenaka to the Council in October. The hope is that the Key Points may help stabilize the financial system and also obtain public understanding concerning the banking industry's positions. The Key Points will be further elaborated and publicized at the "Forum on Public Finance Issues" to be held in February.