Staff writer Sadakazu Tanigaki, new chief of the Financial Reconstruction Commission, said Monday that he will be committed to "fairness and transparency" in handling reforms to the banking system, following the sudden resignation of his predecessor for seemingly antireform remarks. "The nation's administration over financial institutions has been radically shifted to rule-based transparent administration" in recent years, he said in an interview. "Basically, I will follow this direction." Tanigaki, 54, was appointed FRC chairman and Cabinet minister Friday by Prime Minister Keizo Obuchi after Michi Ochi resigned for making comments that were widely interpreted as suggesting the FRC could be selectively lenient in its inspections. Bank inspections are carried out by the Financial Supervisory Agency, another state agency whose authority is delegated by the FRC. Tanigaki explained one dilemma he faces in entering his new job: that while direct meetings with bankers can help him understand the reality of their situations, they also invite the risk of discretionary administration. "How (the authority) keeps or does not keep its distance from people is an eternal question in a democracy," he said, adding that it finally comes down to making reasonable judgments of politicians. But he stressed it would be unacceptable if his conversations with bankers were taken as bending the rules. As major banks reinforced their capital bases with public money last year, consolidation of small banks and credit cooperatives will be considered the primary task of the FRC in 2000 and 2001. He said regional financial institutions should try hard to be more competitive and support regional economies, but added it is not the FRC's job to decide what they should do. The FRC will consider capital injection only after these banks apply on their own initiative, he said. The recent moves of nonbank firms trying to enter the banking business, particularly Internet banking, interests him greatly, he said. The FRC is in charge of bank licensing as well. Internet banking may improve consumer convenience, help develop financial technologies and bring in new types of banks, all of which should stimulate the sluggish economy, he said. But while Tanigaki feels positive about the moves, he is still cautious of potential risks of nonbank firms operating banks. "To be honest, we do not have an answer to that yet," he said. One of those firms, Ito- Yokado Co., a leading supermarket chain operator, plans to begin banking operations, but its plan must first be evaluated by the FRC.Ito-Yokado plans to create a bank that would primarily earn revenues from fees charged by automated teller machines to be installed at convenience stores of subsidiary Seven-Eleven Japan Co. Meanwhile, Tanigaki expressed concern about the controversial bank tax planned by the Tokyo Metropolitan Government. He said the tax is not consistent with the central government's efforts to reconstruct the banking sector with public funds. Tanigaki, a lawyer from Kyoto Prefecture, has been a member of the House of Representatives for the Liberal Democratic Party since 1983. He served as parliamentary vice minister from July 1998 to October 1999 under Finance Minister Kiichi Miyazawa. The ministry and the FRC are jointly responsible for policy-planning to prevent financial crises. In October's Cabinet reshuffle, Tanigaki had emerged as a candidate for FRC chief. But he declined the post because, it was believed, he belongs to the LDP faction led by Koichi Kato, who was a major contender against Obuchi in the LDP presidential election the preceding month.
