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The Cabinet officially decided Tuesday to set up the Financial Supervisory Agency, the body that will take over the inspection and supervisory functions of the Finance Ministry, on June 22.

Ministry officials said the FSA will start its operations with a staff of 403, including Director General Masaharu Hino, currently head of the Nagoya High Public Prosecutor’s Office. More than 80 percent of the staff will consist of officials who now belong to the ministry.

The Securities and Exchange Surveillance Commission, currently under the wing of the ministry, will be part of the FSA. The ministry’s powers are being split in response to public criticism in recent years of the ministry’s control over both planning and supervision of financial affairs. The ministry’s dual functions have been blamed for recent wrongdoings.

In a related move, the Cabinet also decided to merge three advisory panels to the finance minister into one body that will discuss all matters in the industry, the Finance Ministry said Tuesday. The abolished panels are the Securities and Exchange Council, the Financial System Research Committee and the Insurance Council. Their functions will be replaced by the new financial council because the “Big Bang” deregulation is breaking down the walls between the banking, securities and insurance sectors. The new panel will have 20 or fewer members.

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