Public Policy Planning & Consulting Co. (SEISAKU-KOUBOU) is a public policy consulting firm based in Tokyo, covering broad policy areas such as economic policy, fiscal policy, regulatory policy, administrative reform, international trade and investment, etc.
PPPC provides consulting and briefing services to the clients in the central/local governments, Diet, local assemblies and the private sector.

This blog is aimed at providing general information, latest updates and some of our analytical reports about Japan's public policy in English.
The contents include;
- updates on some important government councils, especially those in which our executive officers serve as the members,
- weekly reports on latest news in Nagata-cho, the political center in Japan, (partially).
- analytical reports and articles by our members and distinguished experts outside the firm,(partially).


Transition in Inspection Policy toward Banks

* Written by PPPC Visiting Fellow

 TBSs drama Naoki Hanzawa had an audience rating of 42.2% in its
final play on September 22. One of the central themes in the drama was
the battle between the banks and the financial authority over the

 When the bad loans of the banks were so serious in this country,
every financial institution was afraid of the inspections by the
Financial Services Agency.

 After the collapse of Japans bubble economy, due to the increasing
criticisms against the Ministry of Finance for treating too leniently
the financial institutions caused to have a huge amount of
nonperforming debts, the governmental branches in charge of checking
and supervising the financial institutions were separated from the MoF
and the new Financial Services Agency was established.

 The main feature of the Agency was that the Inspection Bureau, in
charge of on-the-spot inspections, was designed as a highly autonomous
branch separated from the Supervisory Bureau engaging in day-to-day
investigations in order to prevent on-the-spot judgments from being
discarded by the supervisory branch finally responsible for improving
the performances of the banks; an internationally-unique institutional

 For such a historical background, the Inspection Bureau carries a
heavier weight in the Financial Services Agency and its Commissioner
s post has been dominated by the ex-inspection bureaucrats.

 In the past, all the inspectors from young to veterans used to
investigate rationality and appropriateness of the banks
categorization of the debtors based on the financial documents called
the line sheets submitted by each branches of the financial
institutions. Based on categorization as the normal debtors, debtors
to be watched, debtors in risks of bankruptcy, debtors substantially
in failure and debtors in failure, the financial losses of the banks
would be calculated and the amount of allowance would vary. In the TV
drama, the focus was whether the fictitious hotel would be categorized
into the debtors substantially in failure.

 Roughly speaking, the traditional way of supervising the industry was
that the Inspection Bureau notified the banks of the final results of
its inspections based on the spotted points submitted from the actual
site, and the Supervisory Bureau tried to reflect the result of the
inspections into its requests to the industry to improve management of
the financial institutions.

 Nonetheless, such the financial administration weighted on the
inspections has come to a turning point this time. Traditionally, the
FSA had released the annual basic guideline and basic plan of
inspections every year (July-June), and released its supervisory
policy simultaneously but separately.


This continuance by PPPC Briefing Service

 PPPC’s weekly updates and articles are fully accessible to the
 subscribed customers.

No comments:

Post a Comment