Apr.26.2007

Japanese Bankers Association

Chairman's Comments on the Implementation Plan for Succession of Japan Post Businesses

On April 27, Japan Post released the Outline of the Implementation Plan for Succession of Japan Post Businesses. The JBA Chairman issued the following comments on the same day.

Today, Japan Post submitted the Implementation Plan for Succession of Japan Post Businesses to the government and released its outline to the general public.

We have maintained that to smoothly integrate the government-run postal savings with private financial markets it is essential to "reduce its scale" and "ensure fair competition with private financial institutions." We have also maintained that it would be necessary to remodel the management system in a manner befitting a private institution, attain efficient management and reduce risks.

The Implementation Plan revealed that the Postal Savings Bank intends to enter into a broad scope of businesses centering on personal finance needs soon after being privatized. We think this early business expansion without fulfilling the above-mentioned conditions will pose serious problems as long as the government investment remains.

Complete privatization of the Postal Savings Bank will only be realized in the future if the Bank transforms into a sound financial institution acceptable to the markets by implementing the policies that JBA has promoted as described above.<//p>

We ask that the government and Postal Services Privatization Committee understand the intent of our opinion and fully deliberate on the issue so that the Postal Savings Bank may smoothly integrate into private financial markets.