[talk] The government should carry out drastic reform to protect itself against coexisting with crisis.

Makoto Utsumi: President, Japan Center for International Finance

Makoto Utsumi was born in 1934. After he received an LL.B. from the University of Tokyo in 1957, he joined the Ministry of Finance in the same year. He worked at the Japanese Embassy in Belgium, the National Tax Administration Agency, the Japanese Embassy in the U. S., served as the Deputy Director of the International Bureau, and finally become the Vice Minister of Finance for International Affairs. In 1989 he was named Policy Maker of the Year, and retired from the Ministry of Finance in 1991. He has served as a Professor at Keio University since 1992, and as the President of the Japan Center for International Finance, since 2001.

Mikio Wakatsuki: Chairman of the Board of Counselors, The Japan Research Institute, Ltd.

Mikio Wakatsuki was born in 1933. After received received his LL.B. from the University of Tokyo in 1956, he joined the Bank of Japan in the same year. He subsequently seconded to the IMF (International Monetary Fund), was posted to the overseas representative office in New York, and was assigned Director of Research and Statistics Department in the Bank of Japan. He became Executive Director of the Bank of Japan in 1989 and Chairman of the Board of Counselors of the Japan Research Institute Limited in 1993. He has served at the present post above, Chairman of the Board of Counselors, The Japan Research Institute, Limited, since 2000.

Kiyoshi Tsugawa: Chairman, Lehman Brothers Japan Inc.

Makoto Utsumi was born in 1934. After he received an LL.B. from the University of Tokyo in 1957, he joined the Ministry of Finance in the same year. He worked at the Japanese Embassy in Belgium, the National Tax Administration Agency, the Japanese Embassy in the U. S., served as the Deputy Director of the International Bureau, and finally become the Vice Minister of Finance for International Affairs. In 1989 he was named Policy Maker of the Year, and retired from the Ministry of Finance in 1991. He has served as a Professor at Keio University since 1992, and as the President of the Japan Center for International Finance, since 2001.

Mr. Tsugawa, participating in the market directly as the head of Japanese operation of a foreign investment bank, points out that there is a great perception gap between Japan and the overseas community in regards to the current status of the economy by quoting an opinion of an American government dignitary. That gap will have to be removed as soon as possible. In order to close the gap, the Japanese government and the banks should send a clear message to the market concerning the disposal of bad loans and their plans to expedite structural reforms that will solve the problem.

On the other hand, both Mr. Utsumi and Mr. Wakamatsu are of the opinion that the government does not need to follow the market but they do agree that a clear message to the market's view is necessary. They do not believe that there is much danger of a steep decline in the yen rate or in the price of Japanese government bonds, and neither is there a concern over capital flight from Japan, although there is a danger of overshoot in the stock market. They also believe that the greatest effort to solve the bad loan issue should be made using schemes currently proposed however, that is not the only structural reform must be made.

Mr. Wakatsuki says that the structural reform will take considerable time and it must proceed on a step-by-step basis, accelerating the transfer of resources from inefficient industry sectors to efficient sectors. Throughout this process, we must line with the crisis.

Mr. Utsumi is of the same opinion, and adds that the first priority in the government's role is to prepare to play in preparing a safety net for the unemployed as its first priority in supporting corporate restructuring. He is also concerned that political anxiety will become economic anxiety. The Liberal Democratic Party should not support the Koizumi's Cabinet. Although there might be slight differences within the LDP over Prime Minister Koizumi's policy on structural reform itself must be overcome.

All three have a common desire to stop a decline in stock prices for the time being. In addition, Mr. Tsugawa insisted that the Prime Minister and banks should release a resolute message to remove weak view in the market. Mr. Wakatsuki suggested that 1) banks should set forth a policy intended to stop the downward spiral of the economy, 2) the Finance Services Agency (FSA) should decide to use public funds, and 3) the FSA should let the Bank's Shareholding Acquisition Association begin its operation at an early stage by expanding the limit of the government’s guarantee by using Bank of Japan funds. Mr. Utsumi mentioned utilization of the Resolution and Collection Corporation (ROC) and suggested its role be reinforced.