123rd Diet, House of Representatives, Committee on Finance, No. 4, February 26, 1992 (Heisei 4) (Response by Director-General of the Banking Bureau Tsuchida Masaaki: Lifting of the aggregate control).

Claims Supported by This Source

1. Kimura Shigeyuki, Director of the Land Price Research Division, National Land Agency (Explainer): The main cause of the recent surge in land prices was a sharp increase in demand for commercial land in central Tokyo, which led to replacement demand in surrounding residential areas and an increase in speculative transactions anticipating this. He cited as background factors the so-called excess liquidity situation, the lack of a system to promote proper land use, and the long-held public perception that "land is advantageous as an asset."
2. Explainer Kimura: The factors for the decline were the expansion of designated surveillance areas under the National Land Use Planning Act to cover 80% of urbanized areas nationwide, changes in the financial situation that had been behind the rise in land prices, and a comprehensive review of the land tax system, including the creation of a land value tax. Non-essential and non-urgent speculative demand has largely disappeared.
3. Hamamoto Eisuke, Director-General of the Tax Bureau: The Land Value Tax originated from the land tax system reform, starting with the Basic Land Act, and was enforced from January 1 of this year (1992). It was positioned as a long-term measure aimed at "the grand objective of shattering the land myth." Committee member Ikeda Motohisa stated that the Land Value Tax had retreated from its initial policy and its content was said to be "watered down."
4. Tsuchida Masaaki, Director-General of the Banking Bureau: The quantitative restrictions were part of a series of guidances on land-related financing by financial institutions that had been ongoing since around Showa 60 (1985), and were introduced as an emergency measure from April of the year before last (1990).
5. The growth of land-related financing has generally settled into a restrictive trend, the screening and management systems of each financial institution have been enhanced, and taking into account land price trends, the policy to lift the quantitative restrictions was decided at the end of last year (end of 1991).
6. Even after the lifting, the stance of eliminating financing related to speculative land transactions was firmly maintained through the use of financial inspections and hearings, and a mechanism for the effective activation of quantitative restrictions (trigger system) was specified in advance.
7. Committee member Ikeda Motohisa: Wasn't the lifting of quantitative restrictions due to strong voices from a weak point in the Ministry of Finance? If the trigger system had been established sooner, perhaps the bubble wouldn't have become this severe.

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