October 2, 1999
Financial Supervisory Agency
The Government of Japan
|Statement by the
-- On the Niigata Chuo Bank, Ltd.--
- In view of the low level of the
capital adequacy ratio of the Niigata Chuo Bank, Ltd.(the Niigata Chuo Bank) at the end of
March, 1999, which reflects the result of the financial inspection of the bank - as of
September 30, 1998 - conducted by the Financial Supervisory Agency (FSA) , the FSA issued
an order of Prompt Corrective Action to the bank on June 11, 1999 including a demand to
take measures to enhance its capital adequacy ratio.
- Under these circumstances, the bank
submitted, on October 1, to Financial Reconstruction Commission (FRC) a report according
to Clause 1, Article 68 of the Law concerning Emergency Measures for the Reconstruction of
the Function of the Financial System (Law). Based on this report and situation concerning
the Niigata Chuo Bank such as cash flow of the bank, the FRC has decided today to place
operations of the bank and management of its assets under financial reorganization
administrators, pursuant to Article 8 of the Law.
- While the bank will continue its
normal operations under the financial reorganization administrators, the FSA issued to the
bank, immediately after the bank's submission of the report to the FRC mentioned above, a
management improvement order based on Clause 1, Article 26 of the Banking Law. This order
aims to prevent the deterioration of the bank's asset quality through requiring the bank
to manage its business in a sound manner.
- The FSA will continue to make use of
its supervisory power in an appropriate manner through the strengthened on-site inspection
and off-site monitoring, and strict enforcement of the Prompt Corrective Action. With
these efforts, the FSA intends to further strengthen the Japanese financial system by
ensuring sound management of individual financial institutions. The FSA will thereby make
its utmost efforts to protect depositors and others, to maintain orderly financial system,
and to ensure the stability of the financial markets at home and abroad.