Takeshi Kunibe, Chairman
Japanese Bankers Association

New Year’s Message

  As we approach the beginning of 2017, I would like to offer you my best wishes for the new year and take this opportunity to share some thoughts about what lies ahead.

  Looking at the economic prospects for the new year at home and abroad, conditions will continue to pick up in the United States, while other countries overseas, especially developed nations, will maintain their steady recovery. In Japan, thanks to continued improvement in the hiring and income environment, the economy will undergo a moderate recovery. Going forward, it will be necessary to pay careful attention to various risk factors, mostly outside Japan, which could cause a downturn—especially the growing political risks resulting from Brexit and the U.S. presidential election, the bad debt problem in European financial institutions, and the rapid deceleration of the Chinese economy.
  In this context, the Japanese banking sector is expected to provide firm finance-related support for initiatives aimed at overcoming deflation and enabling the revitalization and sustained growth of the national economy by strengthening its inherent growth potential.
  Following my appointment as chairman of the Japanese Bankers Association in April last year, I declared that 2016 would be “a year in which we support the elimination of domestic deflation and the achievement of economic recovery” and identified three goals through which we have pursued this goal. I would like to talk about these specific initiatives in more detail.

  To begin with, the first goal is “to perform every function of high-quality financial intermediation”. In this regard, our member banks have worked to provide funding based on business assessments as well as identifying latent capital needs by providing consulting services and offering solutions that resolve management issues for customers, such as business succession or business revitalization. In addition, in order to support stable asset formation for individuals, the banking sector has worked to promote more widespread use of NISA and Junior NISA, and based on discussions of fiduciary duty by the Financial System Council, banks have pursued efforts aimed at establishing and implementing customer-oriented business conducts. Moreover, in April last year, we began applying “guidelines for out-of-court settlements for a natural disaster” relating to debt adjustment for victims of natural disasters in order to help customers who are struggling to repay existing loans following the occurrence of a disaster. We are encouraging member banks to apply these guidelines in order to support victims of the Kumamoto earthquake.
  Going forward, we wish to continue making an active contribution as an industry to implement the government’s growth strategy by carrying out our function of high-quality financial intermediation.

  With regard to the second goal, “to sophisticate financial infrastructure that is secure, reliable and respond to the IT revolution”, we are considering how to enhance settlement services.
  As an initiative aimed at dramatically enhancing the functioning of Japan’s settlement infrastructure, we have been considering switching to XML messages. “The review committee on the transition to XML messages”, which includes representatives of the financial sector and industry as well as the Financial Services Agency, Ministry of Economy, Trade, and Industry, and Bank of Japan, has been considering the direction, timeline, and so forth for establishing the new system. We will continue to draw on the opinions of various stakeholders as we push forward with practical efforts of transition.
  Furthermore, we are actively working to deliver innovative financial services and dramatically improve operational efficiency by incorporating FinTech. Last year, the JBA set up “The review committee on ideal way of open API” and “The review committee on blockchains”. These committees are moving forward with considering the application of these new technologies.
  Our third goal is “to establish a robust financial system which does not depend on the economic climate.” In this regard, we continue to devote efforts to adapting to the revision of international financial regulations. In particular, it is possible that revisions to risk measurement methods being considered by the Basel Committee on Banking Supervision will have a major impact on Japanese banks’ business model, so we have been actively sharing opinions on this issue in conjunction with overseas banking associations, in addition to other ongoing activities such as submitting comments on various consultative documents and seizing opportunities to express the JBA’s own views at various meetings involving the public and private sectors.
  With the aim of ensuring a balance between financial system stability and sustainable economic growth, we will continue to collaborate closely with Japanese authorities while asserting views that take into account our nation’s financial structure and business practices. We are also steadily moving forward with taking steps to facilitate the implementation in Japan once international agreement over the new rules has been reached. In addition, in order to improve the transparency and fairness of benchmark interest rates, JBA TIBOR Administration conducted consultations regarding reforms to TIBOR in November last year, and we are continuing to pursue initiatives aimed at implementing these reforms.

  Japan is approaching a critical juncture as it seeks to overcome deflation and revitalize its economy. Going forward, the banking sector is of course expected to help provide a firm platform for economic growth by fulfilling its function as financial intermediary in an appropriate manner, and we are also expected to carefully monitor change in the economic environment and contribute to the development of Japan’s economy as a growth industry. With this in mind, we intend to keep working to establish a solid foundation for the next 5 years, 10 years, and beyond.
  In closing, I hope that this year will be one with great success for everyone.