Mr. KandaThank you very much for your precious time when youre extremely busy. Ive often met with you and benefitted from your insightful views particularly since we both joined the Securities Summit at New York as the panelists. Today Id appreciate your sharing with the readers your personal ideas on the financial market, Japanese society and the international community as well.

Historical prospects of human community

Mr. KandaI always admire your strong network and deep and wide perspectives on global dynamism. Were facing the danger of prevailing populism, xenophobia and intoler-ance, as apparently evidenced by the Brexit ref-erendum and the US Presidential election, and now at the midst of the French one, heading for

the German general election as wellWe seem to be at a critical juncture of whether we can maintain a sound civil society and peaceful and prosperous world order. The background of this trend is multiple, but is said to include the col-lapse of the middle class and widening inequal-ity due to globalization and technological inno-vation as well as malfunctions of mechanisms to formulate public opinion owing to the IT rev-olution. How do you analyze the current situa-tion of human society, in particular, democracy in domestic politics, and multilateralism in the international political economy?

Mr. KindredFirst let me say its an hon-or for me to be here and to be working with you on this piece.

I think that its pretty easy to get caught in the gloom and doom of the latest news cycle.

Mr. Jonathan B. Kindred196089200710MUFGUFJ

Kanda Masato M.PhilOECD

34 2017.7

64

11_P34-49_Hearing_04.indd 34 2017/07/05 15:20:43

And I think, over the last couple of years, weve had incidents in the political system that have been somewhat shocking to the estab-lished order. And that is causing a significant amount of soul searching on whether there is something fundamentally problematic.

My own view is that the state of humankind today is actually very good. Better than it's ever been in the course of human history. And its important to think about that reality, whether you look at poverty rates, the avail-ability of very high quality healthcare, the healthy state of humans in general, and the conveniences that we have in living our daily lives today in the world. All of these things are tremendously attractive relative to points in history. And we achieved them, the world achieved them, through a process of techno-logical innovation and globalization, which has yielded tremendous benefits.

But also, what were seeing in recent times, obviously, is the fact that some people feel left behind by these very valuable forces of tech-nology development and globalization and the established political order has not adequately appreciated that. And so, again, I see it as the human state today is very good but we have to appreciate the fact that there is some dissatis-faction among some disenfranchised elements of our society as technological advancement has continued very rapidly. And so we need to think more holistically about what kind of ap-proaches can we take in the world. This re-quires a completely evolutionary set of thinking processes.

And one of the relevant issues is that estab-lished social democracies with well-developed democratic processes have a tendency to yield governments which get too big. And which be-gin to syphon too much resource out of the economic system for themselves and also for vested interests that figure out how to take ad-vantage of the political system to serve their own vested interests. So, my view is that we need to think about more radical approaches.

For instance, universal basic income is, per-sonally I believe, something that the world should be contemplating as we go forward.

And the reason for that is that the world is getting to be very wealthy, very advanced in terms of conveniences, but also, were spending a lot of money and were very inefficient trying to recycle it and its obvious from these recent events that the beneficiaries of that recycling dont feel that its fair. So, its not only ineffi-cient but the beneficiaries largely feel that its unfair. I think that theres a point in time when we have to recognize that the world has be-come so good, so advanced and so fundamen-tally wealthy that every person living in the world should have a basic right to a basic level of income and not have to rely on hand-outs from the government beyond the basic income to have a satisfactory lifestyle. And this has been contemplated in certain countries, but has not yet been adopted. Its obviously a very rad-ical approach because any change to govern-ment entitlement structures leaves some vested interests losing. So, this is a big challenge.

Mr. KandaThank you very much for your very insightful idea, which I take it as a rather cautious optimism. I agree with you that, while preserving the technological inno-vation and globalization, which has been quite beneficial to human welfare, we should and can address the emerging problem resulting from them by providing the people left behind the opportunities to benefit from them, though the suggested concept of universal basic in-come has serious problems and seems very dif-ficult to implement.

This transformation has influenced the finan-cial sector greatly as well. On the one hand, political instability and policy unpredictability are part of the most serious problems for the risks perceived by financial markets. On the other hand, the financial sector has been rec-ognized as one of the causes and solutions of these risks. For instance, the greedy culture of

2017.7 35

64

11_P34-49_Hearing_04.indd 35 2017/07/05 15:20:44

Wall Street and cybersecurity have been favor-ite themes of the US elections and the Con-gressional debate while Fintech is highlighted as a promising area to improve financial inclu-sion at G20 and FSB. What do you think of the role of the financial sector, in terms of its op-portunities to contribute to sustainable growth and its risks to exacerbate social instability?

Mr. KindredSo, I think that having a well-functioning financial system is essential to both financial stability and economic growth. The financial system needs to work well. It needs to be efficient, encourage innovation and enable that innovation to be deployed for customer satisfaction and client service in ef-fective ways.

Also it needs to be regulated in a way that recognizes the potential for excess, which can exist in any activity. We saw going into the fi-nancial crisis of ten years ago that excesses got out of control in the financial sector. And many of the responses to that through regulation, the core pillars of that response, I think have been effective. But often, as is the case when an ex-cess happens, theres often an excessive reac-tion.

But I believe that the world needs intermedi-aries to bridge providers of capital and users of capital in an efficient way. Because the world is globally connected, those financial institu-tions need to function on a global basis in the context of frameworks that recognize the glob-al nature in what our clients require.

So, harmonization of global regulations, which recognizes the need to balance stability and growth objectives, is important. And the fi-nancial sector will be adopting the digital tools that are evolving in todays rapidly advancing technology sphere to better provide customer satisfaction and client service and ensure the capital gets to places where it can be deployed for effective benefit and growth of the overall economy.

Opportunities and Risks of Japan

Mr. KandaYouve lived in and watched Japan for quite a long time. Japan is facing a decreasing and aging population and an un-precedented accumulation of fiscal deficit at the midst of the even more competitive global market and destabilizing international politics. Indeed the Japanese potential growth ratio has been close to zero for a long time while it still enjoys the highest level of science and technol-ogy, culture, as well as public safety among others. How do you analyze the pros and cons, and, opportunity and risk of Japanese society in the future?

Mr. KindredI think Japan has a wonder-ful society right now. The rule of law, the cali-ber of education, the quality of infrastructure, the advancement in science, the construction standards, so many things of excellence and those are a real demonstration of the achieve-ment of the country over this past period of time.

As you noted, the critical issue facing Japan is the demographic profile. And that is a huge issue. Growth over time is a function mathe-matically of labor supply and total factor pro-ductivity. So, if labor supply is going down at a pace equivalent to the projected demographic change, in order to maintain the same level of economic output, the country will have to have tremendous advances in total factor productiv-ity. So, those things together need to be as-sessed very carefully.

I commend the Abenomics policy mix, and we discussed this many times. I think the three arrows are very powerful if deployed in a complementary and consistent manner. And so, I am of the view that thats the right pre-scription. But even with very active deployment of those three arrows, I think its still a very dif-ficult hill to climb because the demographic profile is so severe. But, I think the labor force participation changes witnessed under Abeno-

36 2017.7

11_P34-49_Hearing_04.indd 36 2017/07/05 15:20:44

mics with Womenomics policies have been highly successful. And the next stage of raising participation rates by older workers is good.

Were particularly interested in the guest workers. The very positive development is that theres about 1.1 million guest workers in Ja-pan right now. 176,000 new entrants in 2016. Those are quite good numbers.

This is an important thing because I know theres a strong social concern about immigra-tion. But it seems quite clear, looking at the data, that the government has been reasonably effective in maintaining an acceptable approach to guest workers. And so, this is again some-thing that needs to be looked at very carefully and managed carefully over the coming time.

You used the word cautiously optimistic. Im actually more optimistic about the state of humankind but Im cautiously optimistic about the Japan profile because I do think the policy mix is right. And I encourage further focus, particularly on the third arrow of structural re-form because thats critical to further drive ad-vances in productivity.

Thats the next five to ten years. But then beyond that, therell still be a big questionwhere and how does Japan see itself in terms of scale or position in the global context. And even if the population stabilizes at 100 million, thats still a lot different than 125 million. So that presents quite a different picture and I think strategically the country needs to ad-dress that issue. Not right now, because the policy mix is focusing on what can be done now, but what does the country think about in the context of 100 million population and the level of economic contribution to the world that implies versus the contribution that ap-plied at a historical rate over the last 30 years.

Mr. KandaYou rightly mentioned about the structural reforms, most important element of the Abenomics. The market, foreign investors in particular, think the structural reform as the most important effort Japan needs and the cor-

porate governance reform seems most interest-ed and positively welcomed by them, as I also sense as the Chair of the OECD CG Committee, which is the global standard setter on corporate governance. On the other hand, not a few criti-cisms remain against mediocre reforms in the areas including labor, health and agriculture as well as belated fiscal consolidation which might explode as a catastrophe around 2025. In the past, you praised Abenomics particularly for participation in TPP negotiations and the con-sumption tax hike while encouraging vigorous reforms in the labor market and medical regula-tion. Indeed I quite often receive similar opin-ions from overseas investors. Could you elabo-rate which structural reform you can positively rate and what fields of reform are most needed for the Japanese economy?

Mr. KindredIn terms of whats been done, that I think is really positive, the first one I would highlight is the corporate gover-nance area. You know, really excellent stimula-tion from the government, to move those ini-tiatives forward, whether it be the Stewardship Code, the Corporate Governance Code, and the focus on productivity within the corporate sector as a result of those changes. I think thats had real traction.

The agricultural sector is also one to high-light. The breakdown of the monopoly power of the cooperative system has been quite signif-icant. And thats good for the agriculture sector. Japan has fantastic agriculture products, and I think it could be a booming export industry. So, while its a relatively small percentage of over-all GDP, unlocking that could be reasonably in-teresting in terms of at-the-margin change.

Another area that I would highlight is taxa-tion policy. Clearly, the corporate tax rate has come down quite significantly, actually, and I think that was an impressive move for Japan to make, and makes this a more attractive en-vironment for the corporate sector.

As I mentioned, the policies enabling growth

2017.7 37

64

11_P34-49_Hearing_04.indd 37 2017/07/05 15:20:44

in the guest worker population have been quite good.

I think that the electoral reform is an area that hasnt been that good. Were still living in a state of unconstitutionality in the Diet struc-ture and it would be important to see progress in addressing that. I get that thats a tricky one to deal with, though.

And then labor reforms in terms of creating more flexibility. There has been consideration of monetary or pecuniary compensation for dismissal - I would call it a legalized framework for severance. I think such a measure would be a positive development for economic growth in Japan because it would encourage more flexibility in the labor force. It would be a real positive in terms of hiring but I know the way that it often gets spun is, Well, people say that because they want to fire workers. But, in fact, if youre running a company in a cyclical kind of industry or environment, you need to be able to manage the scale of your workforce as you go through different cycles in the envi-ronment. And if you think you can have more flexibility on the downsizing, youre much more likely to have more aggressiveness on upsizing. So, I believe that this policy measure, if it were enacted, would push up the demand for labor curve. And that in turn would result in, over time, more aggregate hiring in the country and higher total growth because you would have more flexibility of labor to move around and take some inefficiency out of strati-fied labor forces.

Future of financial industry

Mr. KandaThe financial sector faces emerging problems including the shrinking of the market due to demographic change, low profitability resulting from protracted low inter-est rates and flat yield curves, harsher competi-tion under the development of fintech, and the higher costs of regulation including AML/CFT which Im dealing with at FATF. Traditional fi-

nancial firms, without innovation in their busi-ness model, might face the risk of extinction as Mr. Bill Gates predicted. Not only FSA, but G20, FSB, as I participate and witness, all closely monitor and seriously discuss on this development. I myself witnessed the difficulty of traditional legacy firms which were chal-lenged by new entrants while being required to maintain trunk lines when I was responsible for the budget for telecommunications and elec-tricity. Hundreds of millions of people in poor countries already enjoy high speed and cheap settlement services through mobile phones without bank branches. How do you find the future of financial industry which is heavily in-fluenced by technological innovation?

Mr. KindredI think the future is incredi-bly exciting. Technology advancement is a good thing and we should never seek to hold it back because technology advancement ex-pands the quality of our lives. It enables us to provide our services in more effective, more ef-ficient ways. One of the drawbacks is that en-trepreneurs and innovators, in designing new technology, they get rewarded well, but some of those rewards again need to come back to the whole society through an appropriate rec-ognition of the framework that society provides for this kind of innovation and advancement.

But the core essence of the financial services sector is intermediating financial flows between providers and users of capital. And, as technol-ogy advances, we can do that in much more ef-fective and efficient ways and youve given some examples. But I know, for instance, as a user of banking services, I love to do my bank-ing on my mobile phone. Its so much easier. Its so simple. In the old days, when you got a check, you had to go to the bank branch and give it to somebody. Now you can just take a photo and its done, its in your account. So, just as an example, its fantastic.

But I dont think that technology is a dis-placement of human expertise in delivering fi-

38 2017.7

11_P34-49_Hearing_04.indd 38 2017/07/05 15:20:44

nancial services. The way I look at it is, these are advances in digital tools, which help human expertise get optimized in delivering services to clients. Furthermore, the advances in comput-ing power today are moving at an astronomical pace, which means that, all of a sudden, there is much more immediate and useful access to the incredible amount of digital data thats available, which can again help us provide bet-ter financial services to customers. And, over time, cheaper, because we dont necessarily need a lot of bricks-and-mortar branches. We can do things through electronic delivery, which means its cheaper. And then, if we look in the institutional parts of our business, the ability to deploy new technology practices for front-to-back processing means much more effi-cient infrastructure plants than we have histori-cally had. So there is this big challenge right now of how do you move from the legacy plant that we had in our business structures and into what the future looks like, and I think this is something thats in the process of happening right now. But I think its very exciting. Some people say, Well, financial service jobs are go-ing away because Fintech will do everything. But that misses a core point, I believe, that the digital tools just optimize the way financial ser-vices expertise and practitioners serve clients.

So, financial services is not going away. If you think about Amazon, for instance, some people dont go to stores any more as they can sit in their living room and buy anything they want from anywhere in the world that they want with a couple of clicks and its delivered to their door the next day. That is an amazing thing. And theres less people working in retail stores but theres more people working in logis-tical distribution warehouses. And theres more people working on advertising algorithms to support the delivery of electronic purchasing platforms.

Mr. KandaRight, its encouraging to hear that the digitalization will not displace the hu-

manity while digitalization transforms human society radically. Among others, this technolog-ical transformation will necessitate the change in the composition of staff mix. For instance, the NY HQ of GS is said to have reduced stock traders from 600 to only 2. Frey and Osborne predicted many of finance related jobs would disappear, replaced by AI. You have made great efforts to develop human capital of your company. Given this changing environment, what kind of skill and people do you think will help the financial industry survive and prosper, and what human resources strategy do you take to deal with this in your company?

Mr. KindredSure. I would say theres some evolution in the skill sets and people we hire. But its not what I would call fundamen-tal. I would say were hiring more people with technical, engineering, scientific kind of skill sets and degrees. But we still like to hire eco-nomics, social science, and liberal arts people as well. I mean, critical thinking skills and abil-ity to communicate effectively with clients is something that will be a consistently demand-ed skill set within our industry, I believe, at the end of the day, the heart of the banking system is trust. And, over time, more and more trust will be given to machines, but I think that the human element of communicating how that should happen will remain pretty central in the industry. And so, we have a really good mix of skill sets, but theres been definitely a migra-tion upward in the proportion of scientific and mathematical, engineering, highly technical skill sets which drive the electronification parts of our business.

And, its critical to be thinking as this evolu-tion happens, artificial intelligence thats com-ing from what we talked about in terms of big data, predictive analytics, and computer pro-cessing power, there will be many jobs that get lost. We think about whats happening with blue-collar lost jobs causing the kind of uproar that weve seen with Brexit and the Trump

2017.7 39

64

11_P34-49_Hearing_04.indd 39 2017/07/05 15:20:44

election. I think were going to see a lot of pressure on mid-level white collar jobs over the next couple of decades as AI picks up. And those functions will have to be rethought in terms of how those individuals and skill sets get transformed. But, at the end of the day, we have to be careful as a society, not to have those affected groups feel displaced by the technology advancement. We have to have policies that make them feel that theyre still part of a happy, advancing world.

Mr. KandaAnd another stuff with the fi-nancial, more traditional question. As you know, we advocated at G20 and the FSB for the comprehensive assessment of the combined effects, particularly unintended consequences against economic growth, of the various inter-national financial regulations introduced since the international financial crisis, and, though I was isolated in the international negotiations at the outset, now it has become one of the main-stream work streams of the FSB. We successful-ly requested to clarify regulatory expectations at FATF as well. How do you evaluate the on-going discussion on international financial reg-ulation including Basel III?

Mr. KindredI have some concerns. I think that there was a very admirable commit-ment to harmonization coming out of the G20 Pittsburg Summit in 2009 and there were a number of very important initiatives that were implemented in the aftermath of that and those are very good for the financial system. But I do think that, in the past several years, there has been some movement away from harmoniza-tion and some level of potential discord or pol-icy deviations. And, to some degree, the amount of continuing regulatory implementa-tion got duplicative and overly burdensome. And I think that the voice of the JFSA has been very reasonable and quite influential, in my mind, in causing some reconsideration of that. And I commend the FSA led by Commis-

sioner Mori who did a lot of good work, I know, on really putting forward the viewpoint that, Hey, we need to just take a pause here and look at how does all this fit together. And how do we get to an appropriate balance be-tween systemic stability and financial interme-diation that encourages growth? What is the right balance between consumer protection and consumer benefit? Whats the right bal-ance between market integrity and transparen-cy and market vigor?

And we need to think about how all these new regulations and work streams of potential new regulations fit into that framework. Thats the work I believe needs to be done and, hope-fully, all of the major global regulators will re-harmonize on the next steps. Because, as global institutions, we feel that we need to be able to work on equal footing in different glob-al jurisdictions.

Prospects of Japanese financial industry

Mr. KandaMoving on to Japanese finan-cial industry, Im glad to see you are now an active member of the Experts Council of the Tokyo Metropolitan Government TMG for the international financial hub. The concept of the Tokyo international financial center was first made public in 2013, the first recommendations made by the Panel of vitalizing Financial and Capital Markets, where I was a task manager of the Joint Secretariat of MOF and FSA. There-fore, Im pretty interested in this development. It released three sets of recommendations of concrete policies, incorporating three categories of short, medium and long-termed targets, in four areas of, 1) establishing a positive cycle in which abundant financial assets held by house-holds and public pensions are allocated more to funding growing businesses (NISA, GPIF re-form etc.), 2) realizing Asias growth potential and improving market function in the Asian re-gion, (Innovation of financial infrastructures, etc.), 3) Strengthening corporate competitive-

40 2017.7

11_P34-49_Hearing_04.indd 40 2017/07/05 15:20:45

ness and promoting entrepreneurship (Corpo-rate governance reform, etc.), and 4) Develop-ing human resources and establishing a better business (One stop service in English, English translation of regulations, etc.). Many of these recommendations have already been realized though further efforts being made. How do you assess the progress made to revitalize the Tokyo financial market?

Mr. KindredI commend the work of the panel you managed, the Vitalizing Capital Mar-ket Panel and there were key recommenda-tions that came out of that, including the Cor-porate Governance Code, the NISA and GPIF asset reallocations. Those have been very good measures, I believe. And they provide a good foundation for thinking about how to more ef-fectively deploy the savings base that exists within Japan.

As you know, the household financial assets have not moved much out of deposits, though, so I think the NISA program is very good and it will be even increasingly utilized. But I think a key element needs to be the change in psy-chology about inflation. And again, I think the monetary policy framework for the most part since 2013 has been very good and were at the very near-term cusp of seeing a more sus-tainable pick-up in the inflation rate. And I do believe that once that gets baked into psychol-ogy of savers that theyll be more willing to mi-grate the bank deposits into capital market products. So, that will hopefully provide some tailwind there.

And the setting up of the one-stop English language service, that was good. Also I know the FSA has a good English language hotline to help with that.

Now the Tokyo Global Financial City Adviso-ry Panel is looking at a whole range of addi-tional ideas about how to further stimulate the Tokyo financial marketplace. And Tokyo has a lot of really important advantages. We talked already about the really high-quality infrastruc-

ture here. Weve talked about the sheer breadth and the depth of the capital markets here, which are huge. Japan has a large, di-verse range of globally active corporations, which are a very good thing to build upon. So, these kinds of things, if the macro picture re-mains steadily better and weve had four straight quarters now of GDP growth above po-tential growth, will be beneficial. If macro con-tinues to get better, these things that the Advi-sory Panel is now looking at will, hopefully, to the extent some are implemented, be additive.

Growth in the asset management sector is important. I think, personally, there could be some further incremental changes in certain parts of the tax policy framework. The labor rules, which Ive already mentioned, as poten-tially something to help smaller financial ser-vices firms with flexibility in their workforce, that kind of thing is important. Financial edu-cation broadly is an initiative that will be bene-ficial. And then more active marketing of To-kyo as a wonderfu l c i ty to come and do business in is also powerful. So, taking what you already started as the one-stop English Language Business Promotion Center and ex-panding it would be a good idea in terms of re-sources and capability focus. And then external marketing more actively to supplement the kinds of things that the Ministry does, or JSDA does, but to really take a very focused business approach to marketing Tokyo.

I should stress that those are just my person-al thoughts. I dont want to steal the thunder of

2017.7 41

64

11_P34-49_Hearing_04.indd 41 2017/07/05 15:20:45

the panel, which will be making recommenda-tions in due course, and I shouldnt prejudge what the panel or TMG may decide is appro-priate or not.

Mr. KandaAs you suggested, Tokyo is of-ten praised for its public security, quality of food and leisure, historical heritage and effi-cient transportation, while said to be handi-capped in the areas of geographical positon, in-convenience in English in business, education and medical services, international human net-works if compared to Singapore at the center of Asia, and convenience of English and common low, for instance. What do you think of the pros and cons of Tokyo as a financial center city?

Mr. KindredMy view is that Tokyo is such a large economy with such a deep capital market and huge wealth of savings that right now is under-optimized, and also has a large number of very important global, leading cor-porations. That, in itself, is a magnet for finan-cial services activity. And, frankly, neither Hong Kong nor Singapore have that. So, thats important to think about in terms of defining how Tokyo should build itself because those el-ements of this economy want high-quality fi-nancial services delivery.

Hong Kong and Singapore have English as a primary language. I do think its very important to contemplate this because English is the lan-guage of global commerce. For Tokyo to be-come even more important, English needs to be more utilized in official disclosures, licens-ing, registration, etc. because its the language of global commerce.

Obviously, the tax rates in Hong Kong or Singapore are significantly different but I dont think that Japan should aspire to move to that level, per se. Having a competitive tax regime is important, but those are city-states that dont have a large social democracy spread through-out the nation to support. I think also that Hong Kong has grown, to some extent, because

its a gateway into China.Should China stumble, though, geo-political-

ly, then thats a development that could benefit Tokyo. And Im not suggesting that that can or will happen, but its not a zero probability. And so, thats something as well to consider be-cause the rule of law, the safety, and the resil-ience of the Japanese society is something that is very highly regarded. And so, as policies get built, those things should be considered and focused on. And I dont think that we should be seeking to do things that are out of touch or out of connectivity with the core elements of what makes Japan an attractive marketplace.

Mr. KandaThe FSA is adapting to this dramatic change in the environment surround-ing the financial sector and implementing sub-stantial reforms including 1) the reforms of the agency and its approaches, 2) the transforma-tion of the flow of funds and the support to the accumulation of household assets, and 3) the support to financial institutions to change their business models and create shared value with their customers. Were exploring, in particular, new supervisory approaches with radical changes of 1) from form to substance, 2) from backward- to forward-looking, and 3) from in-dividual elements to holistic views. As the final question, how do you find the ongoing reform efforts of the financial authorities in Japan?

Mr. KindredI think its a very positive development. I think that its quite refreshing to see the self-assessment process thats been go-ing on under Commissioner Mori and his teams leadership in the organization. The fo-cus, as I said earlier, on financial system stabili-ty versus growth, balancing that and effective financial intermediation to encourage growth, consumer protection, consumer benefit, market integrity, and market vigor. Those are very good goals to be thinking about, I believe. Ap-propriate principles and having market partici-pants think about defining best practices in the

42 2017.7

11_P34-49_Hearing_04.indd 42 2017/07/05 15:20:46

context of principles versus simply achieving minimum standards I think thats a very good evolution as well. I like the merging of on-site and off-site monitoring and, potentially, consid-eration of the integration of the inspection and the supervisory bureaus as a possible further evolution of that. I think all of those initiatives are quite positive for this market. And, actually, it reminds me, one of the things I didnt say a moment ago in answer to the strengths of To-kyo, is the financial regulator is excellent. And Ive said this in the panel and I think that this is something that Tokyo should really market actively. This is a marketplace where there is clearly an effort to have the right level of bal-ance in the key aspects of a safe system with integrity of market participants, but also a place where growth is understood to be a key factor or objective of the marketplace.

Thank you so much for giving us the oppor-tunity today and I should also say from my own personal viewpoint, but also as Chairman of the IBA, we really do value the open-door policy that the FSA has in terms of dialogue across any number of issues. I think thats great for the market. Thank you.

Mr. KandaThank you very much for your too kind remarks. Today I really value your pre-cious time and the very insightful and relevant policy advice. Thank you very much indeed.

IT

2017.7 43

64

11_P34-49_Hearing_04.indd 43 2017/07/05 15:20:46

G20G7

10

44 2017.7

11_P34-49_Hearing_04.indd 44 2017/07/05 15:20:46

1102016176

510112500130

OECD2025TPP

GDP

2017.7 45

64

11_P34-49_Hearing_04.indd 45 2017/07/05 15:20:46

FATF G20G7FSB

FinTech

6002The future of computerizationFreyOsborne

46 2017.7

11_P34-49_Hearing_04.indd 46 2017/07/05 15:20:46

G20FSBFSBFATFIII

2009G20

112013113

NISAGPIF4

NISAGPIF

2017.7 47

64

11_P34-49_Hearing_04.indd 47 2017/07/05 15:20:46

NISA2013

GDP4

48 2017.7

11_P34-49_Hearing_04.indd 48 2017/07/05 15:20:47

29427

23 4

5

iPS6 7 ()8

9

10

11

24 5 6 JR7 8 9

10 11

25 6 AKB487 8 9

10 11 12

26 1 3 4 5 6 7 8 9

10 11 12

27 1

2 3 4

10 11 12

28 1 2 3 4 KKRCEO5 6 7 8 9

10 BNP

11 12 G&S Global Advisors

29 1

2 283 4 5 6

2017.7 49

64

11_P34-49_Hearing_04.indd 49 2017/07/05 15:20:47