NEWSWEEK: Foreign analysts warn that you might reverse policies made by your predecessor. Will you? OCHI: I am more of a clinician than a pathologist. I care about each patient’s medical history and constitution. I want my patients to relax and tell me all about their problems. If I have to operate, my theory is that a patient has to fully understand why such an operation is needed. I was in charge of the financial policy of the Liberal Democratic Party for seven years. I think I have set the financial trend of Japan. From my own experience, I think a doctorlike approach is needed to manage true financial reform in Japan.
How many of your “patients” are terminal? Shouldn’t the weakest ones be urged to merge with strong partners? There are two terminal banks. One is LTCB [Long-Term Credit Bank], and the other is NCB [Nippon Credit Bank]. There are five local banks that are in the second stage. For those, we already have sent custodians to take over management. Others are healthy. Regarding mergers of banks, it’s not something the government should push. It has to be decided among the concerned banks.
Your predecessor encouraged mergers as a way to produce a much-needed shakeout. He must have felt strongly about the reorganization of the financial world. But it is not our duty to push. If banks need help from the government, then we will offer it. But we must give them independence. In the two weeks since I assumed the post, Sumitomo Bank and Sakura Bank announced their merger and three non-life-insurance companies agreed to merge too. They must have been negotiating for some time, but I think they made an announcement of engagement because a welcoming, warm atmosphere exists. Share prices of bank stocks have risen since I became FRC chairman.
What role should foreign investors play? Foreign and Japanese financial institutions should work together smoothly. Otherwise money doesn’t circulate. As for foreign institutions’ buying Japanese financial institutions, my policy is neither to refuse nor to push.
You have been quoted as saying that the Americans bidding to buy the failed Long-Term Credit Bank are looking for a “quick meal.” What does this mean? Because LTCB now is owned by the Japanese government, in selling it I feel as if I am marrying off my daughter to a foreign gentleman. I told the expected new head of LTCB, Masamoto Yashiro, that it is not a good idea for the bank to be sold again in three to five years. If you’re marrying off a daughter, then the marriage should last longer.
