JBA drafted its opinion on the "Interim Report" of the First Subcommittee of the Financial System Council at the Planning Committee held on September 28 and submitted a paper to the Subcommittee's secretariat in the Financial Services Agency on the following day.
In the paper, JBA asked for special consideration of the following three matters.
| (1) | Ensuring that diverse financial products are regulated as extensively as possible, requires a flexible regulatory framework that reflects the characteristics (popularity, etc.) and roles of each product and behavior of market participants. It also should contribute to realizing fairness, efficiency and transparency. |
| (2) | The balance between the benefits and burdens of regulations must be weighed. Excessive regulations that hamper any enhancement in efficiency and innovation, or block users' smooth access to products/services and useful advice, and result in a deterioration in user convenience must be avoided. |
| (3) | Freedom in product planning must be enhanced and transactions between professionals must be deregulated extensively to invigorate the financial markets. In doing so, inflexible, excessive measures to prevent abuses and regulation of the scope of business should be reviewed. |
The paper takes a specific position concerning the above (1) that is: (i) Additional regulation of the sale/solicitation of deposits is unnecessary, (ii) No new/additional regulations are needed on syndicated loans/ABLs since these are similar to bilateral loans in that individual banks evaluate the credit risk, and (ii) Regulation of derivatives should be deliberated prudently since most of these transactions are intended not for investment purposes but for risk control. |