TOKYO, WEDNESDAY, AUGUST 19, 1992 With another steep drop in share prices deepening the sense of crisis in Japan's financial system, the Finance Minister an- nounced a series of measures Tuesday aimed at halting the two-and-a-half-year stock market slide.... In his package... the Finance Minister, Tsutomu Hata, sought to put pressure on big investors not to sell shares and said financial institutions would be permitted to withhold negative financial data from the public in the hope of easing worries about the system's fundamental health. He also said steps would be taken to encourage Japanese banks to make more loans.... "This was perhaps the first real admission from the Finance Minister that the situation is severe and that they have to do something," said Richard Koo, a senior economist at the Nomura Research Institute. "But as far as the content goes, I'm not impressed...." Source: J. Sterngold, "Japan Announces Series of Steps to Try to Halt Stock Market Slide," The New York Times, August 19, 1992.

Required:
1. Evaluate the financial reporting philosophy inherent in the Finance Ministry announcement and compare it to what you understand to be the objective of financial reporting that is designed to enhance efficient investment decisions. What are the differences? What do you think motivated the announcement?
2. What is your conjecture about the nature of the specific “negative financial data” that financial institutions would be permitted to withhold?
3. Do you think that the announcement achieved its intended objective?