Press Conference by KATO Katsunobu, Minister of Finance and Minister of State for Financial Services

(Excerpt)

(Tuesday, May 20, 2025, ９:58 am to 10:11 am)
 

Q.

I would like to ask about Iwaki Shinkumi Bank (credit cooperative) in Iwaki City, Fukushima Prefecture. It has been reported that there is a suspicion that Iwaki Shinkumi made false accounts without the consent of depositors and made loans to those accounts. I would like to ask about your thought to this and the status of the Financial Services Agency (FSA)'s response.

A.

In November last year, Iwaki Shinkumi announced that it had discovered that its former management team had provided bypass loans and that it had established a third-party committee to investigate the matter. We understand that the third-party committee is currently investigating the matter.
The FSA recognizes that it is extremely regrettable that such fraudulent financing was conducted. We strongly urge the credit cooperative to conduct a thorough examination of the cause through an investigation by a third-party committee and to take effective measures to prevent a recurrence. We are also checking the status of the recognition of the fact and the cause analysis by the credit cooperative.
The FSA intends to take strict measures based on laws and regulations while taking into account the results of the investigation by the third-party committee. As you know, Iwaki Shinkumi received a capital participation of 20 billion yen in January 2012 based on the Act on Special Measures for Strengthening Financial Functions in order to take all possible measures to demonstrate its financial intermediary function in the regions affected by the Great East Japan Earthquake.
Including those points, this situation is truly regrettable.
Once again, the FSA will take rigorous actions based on laws and regulations while taking into account the results of the investigation by the third-party committee.

Q.

With regard to the injection of 20 billion yen of public funds in January 2012 that you mentioned earlier, I believe that the FSA needed to conduct stricter checks than other financial institutions because public funds were injected. What is your view on whether the FSA carried out thorough monitoring?

A.

After the discovery of the incident, the FSA immediately requested to confirm the facts and a thorough investigation into the cause. Since then, the FSA has continued to confirm the credit cooperative's recognition of the facts, analysis of the causes, and consideration of measures to prevent recurrence as needed.
It was November last year, and six months have passed since then, and the results of the investigation are compiling by the third-party committee. Based on the contents of the third-party committee, the FSA will take immediate actions.
As you just mentioned, first of all, this kind of thing should not happen, regardless of whether or not it received a capital participation. On top of that, the FSA will thoroughly consider the matter, including the fact that we made a capital participation.

Q.

In relation to this, I believe that the original purpose of the 20 billion yen of public funds was to be used for the benefit of the disaster-stricken companies. Can it be said that this fund was used for the disaster-stricken companies along the original purpose? What are your thoughts on that?

A.

I understand that discussions and investigations are currently being conducted by the third-party committee and other bodies, including those points. While waiting for the results of such investigation, and although we cannot say much in detail, the FSA has been confirming with the Iwaki Shinkumi thus far, and including such matters, we will make a final decision