TOKYO: New Japanese Minister of Finance Shunichi Suzuki has made it clear that the government will continue to promote realignment among regional banks to support their reforms.

“Regional financial institutions are very important for local residents, but they are in a tough business environment due to depopulation,” Suzuki, who took office Monday, said in an interview with media organizations Thursday.

The policy of facilitating regional bank realignment, taken under the administration of former Prime Minister Yoshihide Suga, will not change at all under new Prime Minister Fumio Kishida, said Suzuki.

“Although it’s up to each regional bank to decide business integration, we regard it as an option for business reforms,” Suzuki said. “It’s important to work steadily on business reforms within preset time frames.”

Suzuki, former chairman of the ruling Liberal Democratic Party’s General Council, concurrently serves as financial services minister, overseeing the country’s financial industry.

Regarding a series of system glitches at Mizuho Bank, Suzuki said investigations are underway into the bank’s system and governance and that necessary steps will be taken based on the results.

“Banks are important infrastructure for the society. It’s very regrettable that the system glitches disrupted financial services,” Suzuki said.

Suzuki also responded to a question on Kishida’s promise not to raise the country’s consumption tax in the coming decade.

“The consumption tax plays an important role as a financial resource for social security,” Suzuki said, while adding that he cannot decide alone how long the tax should be kept at the current level.

Kishida plans to draw up by year-end an economic package totaling tens of trillions of yen, mainly measures to tackle the prolonged coronavirus crisis.

It is desirable that a fiscal 2021 supplementary budget be enacted by year-end and that deliberations on the fiscal 2022 regular budget be started as soon as the next year’s ordinary session of the Diet, Japan’s parliament, opens, Suzuki said, citing difficulties extending the session ahead of next summer’s election for the House of Councillors, the upper chamber.

Also, Suzuki said the government will stick to its fiscal reform target of achieving a primary budget surplus in fiscal 2025.

Noting that improving fiscal health is very important, Suzuki said the government needs to ensure progress toward restoring fiscal health in order to maintain the confidence of the market.

JIJI Press