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Privatized postal savings bank will lose from new speculative business

Takenaka Heizo, state minister in charge of postal privatization, acknowledged that a privatized postal savings bank may incur a loss of principal in stocks and bonds it invests. The government previously estimated that the privatized postal bank will run into deficit.

Takenaka's acknowledgement was made in answer to Japanese Communist Party Sasaki Kensho during the House of Representatives special committee meeting on June 15.

Under the government plans, as part of its new business, the privatized postal savings bank will make profits from investing 35 trillion yen on speculative syndicate loans, private bonds, stock, and purchase of credits, on which the principal is not guaranteed.

Sasaki criticized the plan, saying, "People want sound savings investments, not speculating risks. If the new business is entrusted to investment consulting companies and they fail, tax money will have to be used to make up for the loss. This boils down to handing the asset of 340 trillion yen in postal savings and post office life insurance system to giant finance capital firms in Japan and the United States."

Takenaka admitted the risk, saying "There're no bonds or stock without possible loss of the principal." Then, he made the absurd remark, "If we set up a system involving no risk at all, it will collapse like the former Soviet Union."

Sasaki snapped a reply that postal privatization has nothing to do with the collapse of the Soviet Union. He said, "It is the government that is trying to collapse the public corporation," and this statement received applause even from other party members. -- Akahata June 16, 2005