The government has decided to appoint Masaharu Hino, head of the Nagoya High Public Prosecutor's Office, to the post of the first director general of the Financial Inspection Agency, a new government body to be set up in June, Chief Cabinet Secretary Kanezo Muraoka said Wednesday.

Hino, 62, will assume the post on June 22 when the agency is scheduled to be formally set up, Muraoka told a regular press conference. "We believe that Hino is the best person to serve in the important position, considering his expertise in investigating irregular money transactions, including money laundering and internationally organized crime," Muraoka said. "We hope that Hino will fulfill his responsibility and restore public trust in financial administration."

The appointment will be finalized by the Cabinet early next month, Muraoka said. Commenting on the appointment, Prime Minister Ryutaro Hashimoto said the first director general of the new agency should be a person who deals with the administration of financial markets in a strict and fair manner. "Hino is an expert on financial crime and is knowledgeable about international financial matters," Hashimoto told reporters. "We selected him with the hope that he will work in the position in a vigilant manner."

It was decided that the new agency would be set up to reform the Finance Ministry, which has been long criticized for "excessive" discretionary power over both finance and financial market-related matters. The agency will have some control over financial markets by taking over some tasks now carried out by the Finance Ministry.

However, due to continuing uncertainly in Japan's financial industry, the Finance Ministry will partly retain for the time being some functions controlling financial markets related to financial risk management and policy planning to deal with any future failures of financial institutions.