Privatised Japanese postal savings arm to be put under FSA
The government has begun deliberations to place the postal savings business of Japan Post under the jurisdiction of the Financial Services Agency (FSA) at the time of its privatisation in 2007, government sources said Saturday.
Japan Post — a public corporation created in April 2003 to take over mail delivery, postal savings and insurance services from the Postal Services Agency — is currently under the jurisdiction of the Ministry of Public Management, Home Affairs, Posts and Telecommunications.
The government is also considering having the postal savings arm obtain a license under the Banking Law in an effort to integrate it into the private-sector financial system by positioning the privatised postal savings business as a general financial institution, they said.
The Council on Economic and Fiscal Policy, a key government economic policy-setting panel, will formally begin discussions on the issue in the near future, the sources said.
Prime Minister Junichiro Koizumi has placed postal privatisation at the center of his reform drive.
On how to deal with postal savings, the government is considering distinguishing the portion of contracts up until the privatisation in 2007 and the portion of new contracts following the privatisation.
According to the sources, a new bank to be set up at the time of privatisation will be in charge of dealing with new contracts and once it obtains a banking license, the government’s official full-refund guarantee for postal savings in the event that Japan Post fails will be abolished.
As the postal savings arm lacks asset management know-how, the government intends to have it manage funds centering on government bonds, the sources said.
Although Japan Post is currently under the jurisdiction of the posts and telecommunications ministry, it commissions the FSA to conduct financial inspections.
Naoki Tanaka, a private-sector economist, has criticised the scheme, saying, “It is strange from a global perspective that the supervision of Japan’s financial system is dual.”
Placing the postal savings arm under the jurisdiction of the FSA upon its privatisation is aimed at enabling unified supervision of Japan’s financial system.
Meanwhile, the Council on Economic and Fiscal Policy and a preparatory office for postal privatisation to be set up later this month will deliberate detailed business models.
The council is scheduled to compile an interim report April 26 to fully privatise Japan Post step-by-step over around 10 years from 2007.
It is expected to recommend that the government’s full-refund guarantee for postal savings be abolished, but it has said it will come up with a conclusion on business models and other details by the time it compiles a final draft on postal privatisation later this year.
