Chairman's Comments on "Basic Policy on the Privatization of the Japan Post"

On September 10, the Cabinet ratified the "Basic Policy on the Privatization of the Japan Post," which had been drafted by the Council on Economic and Fiscal Policy. JBA released the following Chairman's comments on the Policy on the same day.The "Basic Policy on the Privatization of the Japan Post"Today, the "Basic Policy on the Privatization of the Japan Post" was finalized by the Council on Economic and Fiscal Policy, and then ratified by the subsequent Cabinet meeting. First I would like to thank concerned parties for their earnest efforts tackling this issue.To maintain the soundness of regional finance and control risk properly, JBA has continually requested that fair competition be ensured by curtailing the institution's scale by lowering the deposit limit and abolishing the governmental guarantee. We have also called on Postal Savings being separated from other businesses in view of the importance of blocking risks.Simply turning Postal Savings into a joint stock corporation will not solve the inherent problems of Japan Post. It is essential to implement measures to smoothly integrate it into the market by curtailing the enormous scale. In particular, if freer management is allowed in the migration period prior to full privatization without removing the state-run status, it will result in further bloating of an essentially government-run business, and will aggravate problems, contrary to the ambitions of Postal Savings reform.The following are our apprehensions concerning the Basic Policy. We hope that this will launch sincere discussions towards real reform in future deliberations on materializing the Basic Policy.(1) Specific measures for curtailing the scale of the institution are not shown.(2) It states that the loan business can be expanded in stages.(3) Details are essential to securing a level playing field. This is particularly the case concerning the definition of "privately owned and privately managed," stipulations in the "Special Law of the Banking Law" and operating assets of the "public corporation accounts" together with new accounts.(4) There is no statement about the confidentiality of customer information.We sincerely hope that privatization of the Postal Savings, which is being trumpeted as being on the scale of the Meiji reforms, will have true substance and ensure fair competition and resolve issues concerning Postal Savings.