Current Situation, Challenges and

Future of Regional Finance in Japan

Hisashi Ono Deputy Director-General, Supervisory Bureau, JFSA

January 27 2014

* Any views expressed in this presentation are those of the speaker, and do not

represent the official views of JFSA.

JFSA-ADBI-IMF Joint

Conference

January 27, 2014

I. Current Situation of Regional Finance

1

Banks’ Loans to SMEs

Outstanding amount of banks’ loans to SMEs had been decreasing year on year for some time,

but it increased in July 2013, with year-on-year change of 1.29 % in October 2013.

2 Source: Amount outstanding of loans is calculated from the total of loans to SMEs by “city banks,” “regional banks”

and “regional banks II” in Bank of Japan’s statistics “Deposits, Vault Cash, and Loans and Bills Discounted.”

Regional Banks’ Loans to SMEs

Outstanding amount of regional banks’ loans to SMEs have been increasing year on year.

In October 2013, the loans increased by 1.60 % year on year.

3

Source: Amount outstanding of loans is calculated from the total of loans to SMEs by “regional banks” and “regional

banks II” in Bank of Japan’s statistics “Deposits, Vault Cash, and Loans and Bills Discounted.”

Regional Banks’ Loans to SMEs in the Area Struck by the Great Earthquake

4

Note: (1) Charts are prepared based on figures from the Bank of Japan’s statistics “Deposits, Vault Cash, and Loans and Bills Discounted. (2) Figures for “3 Tohoku prefectures” are total of loans of regional banks whose headquarters are located in Iwate, Miyagi and Fukushima prefectures. Figures for “6 Tohoku prefectures” are the total of loans of regional banks whose headquarters are located in Aomori, Akita and Yamagata, in addition to the 3 Tohoku prefectures. (3) “Nationwide total” is the total of loans to SMEs by “regional banks” and “regional banks II” in Bank of Japan’s statistics “Deposits, Vault Cash, and Loans and Bills Discounted.”

Outstanding amount of regional banks’ loans to SMEs in the three prefectures hit by

the Great East Japan Earthquake (Iwate, Miyagi and Fukushima) are increasing after the earthquake.

In October 2013, the loans increased by 3.83% year on year.

Deposit

(Right axis) 241.2 241.8 246.0 248.0 254.0 257.3 262.1 270.4 277.2 289.5 298.9

Loan

(Right axis) 178.3 177.2 177.7 181.7 186.6 191.4 198.6 198.4 201.5 206.6 212.5

Loan-to-Deposit

ratio (Left axis) 73.9 73.3 72.2 73.3 73.5 74.4 75.8 73.4 72.7 71.4 71.1

Source: Figures are calculated based on the statistics of the Japanese Bankers Association

Deposits, Loans and Loan-Deposit Ratios of Regional Banks

5

(%)

0

50

100

150

200

250

300

350

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13

万

Deposit (Right axis)

Loan (Right axis)

Loan-to-Deposit ratio(Left axis)

(Tril. yen)

(Right axis)

(Right axis)

s

s

s

s

0

20

40

60

80

100

120

140

0.5

10.5

20.5

30.5

40.5

50.5

60.5

70.5

Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13

(Tril. yen) （％）

Deposit (Right axis)

Loan (Right axis)

Loan-to-Deposit ratio (Left axis)

Source: Figures are calculated based on the statistics of the Shinkin Central Bank.

Deposits, Loans and Loan-Deposit Ratios of Credit Associations

6

Deposit

(Right axis) 103.5 105.5 107.5 109.3 111.4 113.8 115.5 117.4 119.7 122.6 124.8

Loan

(Right axis) 62.6 62.2 62.0 62.6 63.4 63.5 64.8 64.1 63.7 63.7 63.6

Loan-to-Deposit

ratio (Left axis) 60.5 58.9 57.7 57.3 57.0 55.8 56.2 54.6 53.2 52.0 51.0

s

s

s

s (Right axis) (Right axis)

Source: Figures are calculated based on the statistics of the Shinkumi Federation Bank.

Deposits, Loans and Loan-Deposit Ratios of Credit Unions

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

15/3末16/3末17/3末18/3末19/3末20/3末21/3末22/3末23/3末24/3末25/3末

（％） （兆円）

0

2

4

6

8

10

12

14

16

18

20

預金（右軸）

貸出金（右軸）

預貸率（左軸）

7

Deposit

(Right axis) 14.8 15.2 15.6 15.9 16.0 16.3 16.3 16.7 17.2 17.7 18.2

Loan

(Right axis) 9.1 9.1 9.1 9.3 9.3 9.3 9.4 9.4 9.4 9.4 9.5

Loan-to-Deposit

ratio (Left axis) 61.7 59.8 58.8 58.3 58.2 57.4 57.4 56.1 54.7 53.3 52.4

(Right axis)

(Right axis)

s

s

s

s

2.04 2.04 1.961.82

1.70 1.641.58

1.54

1.98 2.00

1.79

1.141.80 1.79

1.71

1.73

▲ 0.64▲ 0.77 ▲ 0.71

▲ 1.18

▲ 0.72

▲ 0.61 ▲ 0.29 ▲ 0.36

0.24 0.180.09 ▲ 0.41

▲ 0.03▲ 0.10 ▲ 0.12 ▲ 0.08

1.01

0.800.64

▲ 0.41

0.64 0.650.72

0.81

14.2

10.210.8 10.7 10.6

11.3 11.611.9

11.2

4.54.0

3.73.4 3.2 3.2 3.2 3.1

0

2

4

6

8

10

12

14

▲ 1.5

▲ 1.0

▲ 0.5

0.0

0.5

1.0

1.5

2.0

2.5

Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13

Core net business profits Real net business profitsCredit-related expenses Stock-related incomeNet profit Capital adequacy ratioNon-perfoming loan ratio

（％）（Tril. yen）

Regional Banks’ Financial Statements

8

(internationally active banks based on the Basel III requirements)

(domestic banks based on the Basel II requirements)

Note: (1) Capital adequacy ratios from March 2006 to March 2009 do not include Ashikaga Bank, which was under special public management during that period. (2) Operating profits from core business is equal to operating profits excluding realized gains/losses on JGB holdings.

6.15 6.47

5.61 5.20 5.10

4.75 4.34 4.17

6.30 6.26

4.82

3.37

5.35 5.96

5.33 5.46

▲ 3.05 ▲ 3.26 ▲ 3.03 ▲ 3.11 ▲ 2.75

▲ 2.30 ▲ 2.31 ▲ 2.02

0.62 0.70 0.03

▲ 1.57

▲ 0.06 ▲ 0.57 ▲ 0.43 ▲ 0.41

2.66 2.70

0.90

▲ 2.09

1.54 2.00

1.36

2.17

11.2 11.9 11.7 11.8

12.3 12.6 12.8 13.0

7.1 6.5 6.4 5.8 5.8

6.0 6.3 6.4

▲ 8.0

▲ 6.0

▲ 4.0

▲ 2.0

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

▲ 6

▲ 4

▲ 2

0

2

4

6

8

10

Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13

Core net business profits Real net business profits Credit-related expensesStock-related income Net profit Capital adequacy ratioNon-perfoming loan ratio

（％） （Tril. yen）

0

9

Credit Associations’ Financial Statements

Note: Total of net profits do not include the total net loss of 10.1 billion yen for those credit associations that used measures under Act on Special Measures for Strengthening Financial Functions.

0.90 0.98

1.08 0.95

0.81 0.83 0.78 0.81 0.81 0.92

1.02 1.06 0.94

0.59

0.85 0.85 0.84 0.93

0.03 0.06 0.06 ▲ 0.02

▲ 0.18

0.01 ▲ 0.03 ▲ 0.03

▲ 0.00

0.20 0.15 0.24

▲ 0.02

▲ 0.37

0.14 0.08

▲ 0.10

0.27

9.60 9.60 10.10 10.00

10.10 10.90 11.00 11.14 11.30

11.90

10.70 10.30 10.30

9.00 8.20 8.00

8.50 8.40

▲ 8.0

▲ 6.0

▲ 4.0

▲ 2.0

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

▲ 1.2

▲ 0.8

▲ 0.4

0.0

0.4

0.8

1.2

1.6

2.0

2005/03 2006/03 2007/03 2008/03 2009/03 2010/03 2011/03 2012/03 2013/03

Core net business profits Real net business profits Loss related to stocks

Net income Capital adequacy ratio Non-performing loan ratio

（(Tril. yen)

0

10

Credit Unions’ Financial Statements

(%)

Note: Total of net profits do not include the total net loss of 21 billion yen for those credit unions that used measures under Act on Special Measures for Strengthening Financial Functions.

Even after the expiration of the Act on Temporary Measures to Facilitate Financing for Small and

Medium-Sized Enterprises, more than 90 % of applications for changes in loan terms are accepted by

financial institutions.

Expiration of the Act on Temporary Measures to Facilitate Financing for SMEs

Financial Institutions’ Response to SMEs’ Requests for Loan Term Change

(the rate of requests loan term change accepted: number of loan terms changed/number of applications)

87.9% 90.0% 91.8% 92.3% 93.0% 93.3% 93.4% 93.4% 93.5% 93.6% 93.6%

11

as of August 2013

II. Challenges of Regional Finance

12

- Deposits have been increasing but lending has been flat. As deposits are not used for lending, loan-deposit ratio has declined.

- Interest margin is diminishing due mainly to a decline in loan

rates. Profits from lending have also decreased.

Financial institutions’ loan-deposit ratios and profitability

*Margin between deposit rates and loan rates = loan rates – interest rates on deposits and bonds

Source: the Japanese Bankers Association

In the last 20 years, although nominal interest rates (contracted loan rates) have

been declining, the level of real interest rates have not declined due to deflation.

Nominal interest rates and real interest rates in deflation

Real interest rates = contracted loan rates – rate of inflation (GDP deflator) Loan interest rates are rates for long-term loans, calculated for all banks. Source: Bank of Japan, Cabinet Office.

Margin between deposit rates and loan rates

Source: the Japanese Bankers Association

Interest rates on

deposit and bonds

Margin between deposit

rates and loan rates

Loan rates

Financial Institutions’ Situation and Challenges

13

Banks’ JGB holdings have been increasing.

Banks’ JGB holdings

(Tril. Yen)

Source: “Japan’s Flow of Funds” statistics, Bank of Japan.

(%)

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

0

50

100

150

200

250

300

350

400

450

500

Tril. yen

FY

Depository Institution holdings Share of AssersAssets

Declining Trend of Banks’ Loan-to-Deposit Ratio

Loan-to-deposit ratios of domestic banks by areas

Figures at end-March, except for 1998 for which figures at end-April are used. Loan-deposit ratios are calculated as loans divided by

deposits (including negotiable deposits) and multiplied by 100.

Source: “Deposits, Vault Cash, Loans and Bills Discounted by Prefecture (Domestically Licensed Banks),” Bank of Japan.

50

60

70

80

90

100

110

120

98年 99年 00年 01年 02年 03年 04年 05年 06年 07年 08年 09年 10年 11年

全国 北海道 東北 関東 北陸

中部 近畿 中国 四国 九州・沖縄

（％）

14

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

All region

Chubu

Hokkaido Tohoku Kanto Hokuriku

Kinki Chugoku Shikoku Kyushu / Okinawa

Increasing Importance of Management of Financial Assets in Aging Japan

Share of households’ savings

by different age groups

Savings of households

by different age groups

Source: “Family Income and Expenditure Survey (Savings and Liabilities) (2010),”

Ministry of Internal Affairs and Communications; “Public Opinion Survey on

Household Financial Assets and Liabilities (2010),” Bank of Japan.

0

500

1,000

1,500

2,000

2,500

～29歳 30～39歳 40～49歳 50～59歳 60～69歳 70歳～

（万円）

一世帯当たりの貯蓄保有額（家計調査）

「年金支給開始時に最低準備しておく金融資産残高」（家計の金融行動に関する世論調査）

Source: “Family Income and Expenditure Survey (Savings and Liabilities)

(2010),” Ministry of Internal Affairs and Communications.

60歳～69歳34.1%

70歳～28.3%

50歳～59歳19.5%

～29歳0.4%

30歳～39歳5.2%

40歳～49歳12.5%

15

70’s~

60’s

50’s

40’s

30’s 20’s

20’s 30’s 40’s 50’s 60’s 70’s~

Ten thousands

Desired amount of financial assets at

pensionable age (based on the poll)

Savings per

household

(Age groups)

Japanese SMEs Going Overseas

0

200

400

600

800

1,000

1,200

５千万円以下 ５千万円超 １億円超 ３億円超 　１０億円超　 　１００億円超　

2004年度末

2009年度末

（社）

Number of firms with overseas affiliated companies by size of equity capital

Source: “Survey of Overseas Business Activities,” Ministry of Economy, Trade and Industry.

16

As of end-March 2005

As of end-March 2010

less than 50

million yen

over 50

million yen

over 100

million yen

over 300

million yen

over 1 billion

million yen

over 10 billion

million yen

Financial System Council: Working Group on the Medium- and Long-Term

Modalities of the Japanese Financial Industry

• In March 2011, the Minister of State for Financial Services requested the Council to investigate:

“the medium- and long-term agenda for developing the Japanese economy and financial

industry, by enhancing the international competitiveness of Japanese financial institutions,

improving financial functions in regional economies, and combining these two.”

• In June 2011, the Financial System Council: Working Group on the Medium- and Long-Term

Modalities of the Japanese Financial Industry was established.

• On May 28, 2012, the Working Group compiled and released the report titled “The Japanese

Financial Industry: Desirable State in the Medium- and Long-Term (Present State and Future

Outlook).”

The report focused on three challenges:

• Enhancement of the international competitiveness of the Japanese Financial

Industry

• Improvement of the financial functions in regional economies

• Provision of financial services that meet the needs of the people

17

The report is available here: http://www.fsa.go.jp/en/refer/councils/singie_kinyu/reports/20120831.html

“The roles of the financial industry”

(1) To support the real economy

(2) To lead the economy as a growing industry itself

Towards a financial industry creating values that meet the needs of customers

Financial institutions are required to play roles such as;

• Fulfillment of the risk conversion function

• Function of the information transmission

• Execution of management strategies with a greater emphasis on the customer

perspective

• Development and expansion of business foundations

• Nurturing of experts in finance

Towards a New Financial Industry

18

• Urgent issues faced by regional economies

(1) Rehabilitation and revival of local SMEs

(2) General revitalization of individual rural communities

(3) Promotion of new industries and New Town Planning (“compact-city projects”)

• Broadening financial institutions’ means of taking risks

(1) Strengthening of the risk conversion function

• Making loans and investment without depending on real estate for collateral

(utilization of Asset Based Lending [ABL], etc.)

• Utilization of investment funds (venture capital, business turnaround funds, and

region-based funds, etc.)

(2) Expansion of the function of information production and transmission

• “Industry, academia, finance + government” collaboration (“accumulation of

knowledge and information in finance”)

• Development of human resources with the ability to discern the sustainable

business potential of companies and industries; utilization of outside experts

(3) Reforms on human resources and know-how, financial affairs, and organizational

affairs

• Implementation of integration/realignments and cooperation/alliances among

different financial institutions, etc.

How Financial Institutions Should Be – Local corporate financial services

19

• Challenge for Japanese financial institutions: Enhancement of their capacity to

develop and sell investment products in response to a wide variety of needs of

financial services users

• Development of human resources (personnel who possess financial knowledge

and attach importance to the customer perspective, cultivation of sales people

assuming the professional responsibility [autonomous professional responsibility backed by

specialist knowledge], etc.); and, improvement of the transparency of financial products

and services

• Reviewing the state of institutional investors’ asset management (including the

development of microfinance-based funds, which mediate small contributions by

ordinary people in empathy with investment projects)

• Managerial efforts for the development of products and services in appropriate

response to a wide variety of needs of services users

• Fostering of independent financial intermediaries and neutral financial advisors;

and, reviewing the state of the production and sales separation for financial

services

• Reviewing the state of distributors’ sales channels

How Financial Institutions Should Be – Personal financial services

20

• Correction of factors that are preventing financial institutions from

supplying funds in ways conducive to economic growth

• Development of promising new industries and markets related to medical

and geriatric care, environment and biotechnology, and agriculture in

local communities through the “Industry, academia, finance +

government” collaboration efforts

• Development of an environment which encourages financial institutions

to actively exercise their risk conversion and function of information

production and transmission.

For example, (1) institutional improvement for ABL, (2) spread and promotion of

electronic monetary claims, and (3) diversification of financing methods, mainly a

method for the provision of quasi-equity, such as the use of Debt Debt Swaps

(DDSs).

• Support for financial institutions to expand and reinforce their business

foundations

Public-Private Collaboration Efforts – Local corporate financial services

21

• Strengthening human resources for the enhancement of personal

financial services

• Promoting financial and economic education to improve financial

literacy of customers

• Supporting the entry and development of new players (independent

financial intermediaries and neutral financial advisors, etc.)

• Creating environments helpful for developing and providing

financial services in flexible response to changes in the needs of

individuals

• Transformation of personal funds into capital inducing economic

growth – Expansion of the capacity to supply funds in ways conducive to economic growth through

institutional investors’ risk conversion function

– Opening up of new fund mediation channels

(For example, nurturing of microfinance-based funds)

Public-Private Collaboration Efforts - Personal financial services

22

III. Future of Financial Institution

23

Effective financial intermediation with appropriate risk

management by financial institutions

Complete end of deflation and

contribute to sustainable economic

growth and business expansion

Sustainable safety and soundness of each

financial institution and the entire

financial system

• Identify developments within financial institutions

and markets on a real-time basis and address

potential risks.

• Identify and analyze important issues across the

industry, identify challenges, examine remedies, and

develop policy responses.

• As a general rule, major financial institutions are

subject to the monitoring from the viewpoint of

better business operations (best practice).

(1) Monitor timely and address appropriately economic and market changes

within/outside Japan

(2) Contribute to the current economic policy to overcome deflation, leading to the

following positive cycle

• Fixed point observations of each financial institution

• Focus on the examination of whether financial institutions

meet the criteria set in laws, regulations and inspection

manuals (minimum standards)

Past financial inspection

New financial inspection (New financial monitoring)

• Monitoring of financial systems (with macro-prudential perspectives)

• The FSA continuously monitors what is happening in the financial system, and identifies and addresses potential threats against the financial

system at an early stage.

• Introduction of horizontal review (three mega financial groups, some regional banks, and major insurance companies, etc.)

• The FSA selects important issues for examination which are common to multiple financial institutions and examines the efforts for such issues

across institutions from a unified viewpoint.

• The FSA improves the quality of financial institutions management and raises the level of the financial industry through the review.

(1) Analyze the sustainability of financial institutions’ earnings structure, (2) focus on customers’ business

potential in credit screening, and (3) respect the financial institutions’ assessment for small assets, etc. Review and challenges of the

monitoring method:

Current situation

Financial inspections have generally been aimed at ensuring the financial

soundness and legal compliance of financial institutions

Future challenges

→ The Inspection Bureau and the Supervisory Bureau shall work together to deeply understand the actual conditions of financial

institutions and systems. (*The FSA will review its organizational structure as necessary.) New framework

1. Summary of Financial Monitoring Policy for Fiscal Year 2013

24

2. Outline of the Annual Supervisory Policy for Regional Financial Institutions for Fiscal Year 2013

1. Performing an Active Financial Intermediary

Function, including Management Support for

SMEs

2. Risk Management and Regional

Financial Systems Stability

3. Improvement of Customer

Protection and Convenience for

Users

• To pull Japan out of deflation and achieve powerful growth, financial institutions are expected not only to

support business improvement and recovery of customer enterprises, but also to play their primary role more

effectively and give strong support for the development and growth of their customer enterprises, by actively

providing funds including new loans, while controlling risk appropriately.

• As such, it is important to encourage regional financial institutions to become actively involved in the

provision of new loans that will likely result in business improvement and recovery, development and growth

of customer enterprises, taking into consideration the “Japan Revitalization Strategy” adopted by the Cabinet

in June 2013.

Considering the above, in this fiscal year, the FSA will supervise the performance of financial intermediary

functions by regional financial institutions from the following viewpoints.

(1) Promotion of Initiatives of New

Loans by Financial Institutions which

Emphasize Growth Potential

(2) Deepen Region-based

Relationship Banking

(3) Support for Business Improvement,

etc., to SMEs

Areas to Be Emphasized in Supervision

25

3. Viewpoints for Supervising the Performance of Financial Intermediary Functions

The FSA will encourage the active involvement of regional financial institutions in the provision of

new loans, by intensively verifying their efforts to promote new loans that will likely result in business

improvement, business recovery, development and growth of their customer enterprises.

26

(1) Promotion of Initiatives of New Loans by Financial Institutions which Emphasize Growth Potential

Regional financial institutions should continue and reinforce the efforts to promote region-based

relationship banking involving an entire organization, by setting up a business model looking ahead to

the future, recognizing that region-based relationship banking is a way to contribute to users, the

economy, and society in the relevant region, as well as improving their own financial profiles.

(2) Deepen Region-based Relationship Banking

This fiscal year is considered crucial for financial institutions to start their full scale support for

improvement of SMEs’ business profiles, and reinforcement of business structure.

Each financial institution should work towards real improvement of SMEs’ business profiles, by

providing greater support for business improvement and recovery, such as support for devising highly

effective business rehabilitation plans through performing an active consulting function while

coordinating and cooperating with outside experts and other financial institutions.

(3) Support for Business Improvement, etc., to SMEs

4. Outline of the Regional Economy Vitalization Corporation of Japan

On March 18, 2013, the Enterprise Turnaround Initiative Corporation of Japan was

fundamentally reorganized and initiated operations with expanded functions as the “Regional

Economy Vitalization Corporation of Japan (REVIC).”

27

The objective of REVIC is to vitalize regional economies through the formation of groups of

healthy companies and the securing/creation of jobs by providing support for business

turnaround based on selection and concentration of business and business restructuring; and

support for starting up new business/implementing business change, and regional revitalization

projects.

(1) Direct support for business turnaround

Deadline for deciding support: End of March 2018 Support period: “Less than five years” In the case of a large company, the name of the company will be publicly announced.

(2) Enhancement of regional revitalization ability

Enhancement of cooperation such as dispatching experts to the SME Business Rehabilitation Support Cooperatives and to regional financial institutions

Dispatch of experts to, and capital injection/loans to, subsidiaries for business turnaround Dispatch of experts and capital injection for business turnaround funds

Main Functions

(3) Support for regional revitalization

Dispatch of experts to regional financial institutions Dispatch of experts and capital injection for regional revitalization funds

28

Purpose:

1: Providing New loans - Efforts to provide new loans to start new businesses/ companies - Efforts to support business improvement - Efforts to provide loans that don’t rely excessively on mortgage collateral, etc.

2: Improving profits in the main business (support for expanding sales) - Efforts to expand sales channels - Efforts to expand business, etc.

3: Support for business improvement/business turnaround, etc. - Active efforts for business turnaround - Efforts in cooperation with outside organizations - Efforts through the utilization of investment funds, etc.

4: Support for initiating business - Efforts for identifying customers aiming to start new businesses - Efforts through “industry, government, academia, finance” collaboration, etc.

Main structure:

5. Casebook for the Provision of New Loans and Support for Business Improvement/Business Turnaround

• The casebook collects examples of pioneering initiatives or cases that should be widely practiced with regards to: providing new

loans, improving profits in the main business, supporting business and turnaround, and support for initiating business.

•These cases are promulgated and published in order to encourage financial institutions to take voluntary action while also serving

as a reference for other parties supporting business improvements.

• New loans and support for the commercialization of projects to solve regional problems

• Support for business turnaround through the utilization of “management support funds”

• Upgrading actions for ABL: “Development Manual for ABL Business” and the introduction of “Assessment System for Movable Properties”

• Matching business demands and supplies through the utilization of databases • Support for new product development and the development of sales channels

in order to increase sales

• Examples of business improvements led by second-tier main banks • Consultation and information provision in cooperation with the Federation of

Small Business Associations • Support for business turnaround through the utilization of regional

revitalization funds and the conversion of debt into “equity-like debt” (DDS)

• Support for business start-ups through regional “industries, government, academia” collaboration (management of support facilities established by cities)

• Support for the establishment of public-private joint entities through project finance

Thank you for your attention.

29