The Financial Services Agency (FSA) has begun to study the consolidation of its Inspection and Supervisory Bureaus, which are both responsible for overseeing banking institutions, aiming at implementing the reorganization in summer 2018. This move is meant to facilitate information sharing and exchange of views within the FSA, as well as communication between the FSA and banking institutions.
The FSA has created an experts’ panel to review its inspection and supervisory methods. The panel is expected to incorporate the reorganization plan in a report that it will compile within this fiscal year.
Nearly 700 of the FSA’s 1,570 officials work for the Inspection and Supervisory Bureaus. There is also concern that the new bureau formed by the merger of the two bureaus will be too enormous. Details of the plan will be finalized by this summer. If the reorganization is implemented, this will be the first major structural change in the FSA since it was founded in 2000.
The Inspection Bureau currently conducts detailed inspections of banking institutions’ business operations, while the Supervisory Bureau provides guidance, grants permits, issues administrative penalties, and takes charge of other administrative procedures.
These two bureaus have so far been kept separate for the sake of objectivity in inspections.
While banking institutions’ operations have improved since the FSA was created, there has also been a growing demand for products and services that will contribute to the revitalization of regional economies or the people’s asset building. Since the role of banking institutions has changed with the times, the FSA wants to implement a major reorganization to meet the people’s needs. (Slightly abridged)