Administrative Actions against Mizuho Bank and Mizuho Financial Group

1. Implement promptly the measures formulated by the Bank to prevent the recurrence of the failure.

2. Based on this order, consider the necessity of additional measures to prevent the recurrence of the failure. If the improvement measures are considered necessary, formulate their improvement plan. Implement it promptly thereafter.

3. Conduct a comprehensive review of the IT system risks,　formulate a necessary improvement plan, and implement it promptly.

4. Expend all possible efforts in order to take necessary care of the affected customers.

5. Identify the responsibility for mismanagement.

6. Submit business improvement plans, implement aforementioned measures by the end of June 2011 and report thereafter the status of the implementation of the plan regularly.

1. Implement promptly the measures to improve business formulated by the Group.

2. Based on this order, consider the necessity of additional measures to improve business. If the improvement measures are considered necessary, formulate their improvement plan. Implement it promptly thereafter.

3. Examine the result of the comprehensive review of the system risks conducted by the Mizuho Bank, and formulate and implement an improvement measure as a group.

4. Review the group-wide IT system strategy.

5. Strengthen the management system of the group entities and review the group-wide human resource management system.

6. Clarify where the responsibilities are attributed to.

7. Submit a business improvement plan to implement aforementioned measures by the end of June 2011 and report the status of the implementation of the plan regularly.

1. Irregular termination of the nighttime batch processing, which occurred on the night of March 14 2011 and in the early morning of March 16 2011 ( “primary failure” in the following) , developed to disruptions in ATMs and delays in fund transfers between accounts as a result of inappropriate recovery measures taken by the Bank.

2. The direct causes of the system failure this time were that;

• (1) as certain charity accounts were not opened as corporate/leaf (non-passbook type) accounts, the volume of fund transfers exceeded the upper limits of the batch processing (the primary failure;)

• (2) the secondary failure was caused and developed by the delay of the initial response to the primary failure, an inadequate framework for system failure reporting, the inadequate response to transmission of the exchange transactions, the inadequate cooperation among relevant entities and departments, and the delay in directions to provide and allocate adequate personnel.

The delay of initial responses led to delay of providing necessary information broadly to customers or transmitting insufficient information.

3.In addition to the aforementioned causes, the following inadequate responses were recognized.

• (1) The malfunction of crisis management system due to the delay of management’s initial response.

• (2) The management had not sufficiently engaged in

  • i) development of an intra-group cooperation and reporting system;

  • ii) development of a system contingency plan;

  • iii) strategic investment in the information system;

  • iv) human resources development and appropriate allocation of human resources; and

  • v) development of a system to respond to customers.

4. As mentioned above, since it is recognized that the Mizuho Bank has problems in preventing failures, managing the crisis and responding to customers, it is necessary to implement the measures to prevent recurrence of this failure. It is necessary to inspect the system risks comprehensively amid the changing external environment.

1. As a holding company, the Mizuho Financial Group is recognized to have problems in the exercise of the management functions in the following area.

• i) Development of a system contingency plan;

• ii) Strategic investment in the information technology based on problems inherent in the current system;

• iii) Human resources development and appropriate allocation of human resources; and

• iv) Management of the subsidiaries and intra-group cooperation system.

Therefore, improvement is necessary.

2. Though the Mizuho Financial Group was supposed to engage in developing a sense of unity as a group as one of the improvement measures in response to the system failure in 2002, the engagement is not sufficient and problems are still identified in its corporate culture.