July 10, 2018 / 4:37 AM / 12 days ago

Japan picks Endo as top financial regulator, signals bank reforms to continue

TOKYO (Reuters) - Japan’s government on Tuesday appointed career bureaucrat Toshihide Endo as its top financial regulator, a move widely seen as a sign that reforms to make the banking sector more profitable will continue.

Endo, 59, currently director-general of the watchdog’s supervisory bureau, will succeed Financial Services Agency (FSA) Commissioner Nobuchika Mori, who in his three-year stint has pushed through reforms to boost investor faith in Japan’s stock market and stimulate the flow of funds through its economy.

Endo will formally take up the post on July 17, according to an announcement made on Tuesday by Finance Minister Taro Aso, who is also minister in charge of financial services.

Under Mori’s leadership, the FSA has introduced corporate governance reforms designed to make the Japanese market more attractive to investors, from boosting the number of external directors on boards to encouraging more vocal engagement by investors.

Endo has worked closely with Mori on reforms and is widely expected to continue Mori’s agenda, FSA sources have told Reuters.

“As regional banks face severe business environment amid the dwindling population, Mori has contributed greatly to the pursuit of the way banks should be,” Aso told reporters after a cabinet meeting.

“I put the right person in the right place,” Aso added. “Endo is probably more gentle-mannered than Mori.”

Since 2015, Endo has overseen the country’s financial firms at the FSA’s supervisory bureau, and previously ran its inspection bureau.

Mori has held the financial industry partly responsible for the vast amount of household savings sitting idle in bank deposits, and criticized investment professionals for not working in the best interests of their clients.

Reporting by Takahiko Wada and Tetsushi Kajimoto; Writing by Leika Kihara; Editing by Eric Meijer

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