Bankers grudgingly welcome competition

The nation’s banking industry expressed its conditional acceptance Thursday of newcomers in a meeting with the Liberal Democratic Party’s committee on financial affairs, LDP sources said.

Representatives from the Japan Bankers Association and other banking industry groups said they must accept newcomers as long as they fulfill their obligation to serve public interests and follow corporate ethics expected of financial institutions.

Major firms, including Sony Corp. and Ito Yokado Co., have expressed their intention to set up affiliates to enter the banking business, and the government is currently trying to set standards for screening the newcomers.

Banking industry officials stressed the need to properly check the qualifications of nonbank parent companies in allowing the launch of such affiliates.

They also called for proper government supervision over newcomers’ management.

“We should welcome newcomers, who will provide existing players in the banking industry new stimulation,” a Japan Bankers Association representative said.

At the same time, he called on the government to ease the current 5 percent cap on banks’ shareholding in nonbank firms as a way to allow banks to enter other fields.

“Even if we oppose, the general direction is to accept newcomers to enhance users’ benefits,” said an official of the National Association of Shinkin Banks.