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| (Provisional Translation) June 12, 1999 Financial Supervisory Agency The Government of Japan |
| Statement by the Commissioner |
-- On the Tokyo Sowa Bank, Ltd.--
| 1. | In view of the low level of the capital adequacy ratio of
the Tokyo Sowa Bank, Ltd. the level of which was reported from the bank to the Financial
Supervisory Agency (FSA), the FSA issued an order of Prompt Corrective Action to the bank
on May 31, 1999, pursuant to Article 26-1 of the Banking Law. In addition to the order to
take necessary corrective measures, the FSA required the bank on June 7,1999, to report
its financial status as of the end of March, 1999 reflecting the result of the financial
inspection of the bank - as of September 30, 1998 - conducted by the FSA. |
| 2. | Following the above-mentioned order, the FSA received, on
June 11, a report from the bank that net value of its assets would be deeply negative as
of March 1999. On the same day, the bank submitted to the Financial Reconstruction
Commission (FRC) a report according to Article 68-2 of the Law concerning Emergency
Measures for the Reconstruction of the Function of the Financial System (Law). Based on
this report and the bank’s financial condition, 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. |
| 3. | While the bank will continue its normal operations under
the financial reorganization administrators, the FSA issued to the bank, immediately after
receiving the report that net value of the bank’s assets would be deeply negative, a management improvement order
based on Article 26-1 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. |
| 4. | 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. |