Press Conference by ASO Taro, Deputy Prime Minister, Minister of Finance, and Minister of State for Financial Services

(Excerpt)

(Friday, March 19, 2021, 8:36 am to 8:50 am)

[Questions and answers:]

Q.

I would like to ask a question about the system failures at Mizuho Bank. President Sakai of the parent company Mizuho Financial Group held his first press conference on these problems on the 17th, and indicated the bank would be investigating the causes and working to prevent recurrences, as part of which it is setting up a third-party committee and freezing the change of president at Mizuho Bank that had been scheduled for April 1. However, this press conference only took place about three weeks after the initial failure, and I would like to ask for your assessment of the measures the bank has taken. In addition, the Financial Services Agency stated at its post-Cabinet meeting press conference on Tuesday that it would be intensively following up on this issue, so I would also like to hear your thoughts on when you might be conducting on-site inspections and requesting a report on efforts to prevent recurrences as well as some idea of whether and when you will be considering imposing an administrative penalty.

A.

When major banks such as Fuji, the Industrial Bank of Japan, and Dai-Ichi Kangyo Bank merged, they were all using different computers – IBM, Hitachi and Fujitsu, I believe – and I recall them initially saying something to the effect that they would make things work but it turned out to be like the problems you would expect when three countries unable to interpret each other’s languages. There have been many such stories since then and, although these latest issues did not arise at the end of the fiscal year, a number of elements coincided while system changes were being made. In any case, four incidents in two weeks are a bit much and, what’s more, the reasons for these system failures differed each time. As for the terminals, cards inserted into ATMs were gobbled up and did not come back out. When they didn’t, the users had no choice but just stand there not knowing when they would come out because they did not want someone else to come along just as the card came out and walk off with it. Having to wait for hours on end until the card came back out of the ATM and they could retrieve it caused users anxiety and inconvenience. Because this can naturally undermine trust, and it was not just a single system that went down, they need to do a thorough investigation of the causes. A variety of things coincided so measures to prevent recurrences are important so, in any case, we want to intensively follow up on the efforts taken by the Mizuho Financial Group, including the recently announced decision to set up a third-party commission and so on. While I cannot deny feeling that some rudimentary errors have been made, I will withhold comments for now on what kinds of inspections and supervision will be carried out.