(Provisional Translation)
August 7, 1999
Financial Supervisory Agency
The Government of Japan
Statement by the
Commissioner
--On the Namihaya Bank Ltd. --
In view of the low level of the consolidated capital adequacy ratio
of the Namihaya Bank Ltd. at the end of March, 1999 and the measures for enhancing the
ratio, etc. which the bank reported to the Financial Supervisory Agency (FSA) , the FSA
issued an order of Prompt Corrective Action to the bank on June 28, 1999 to demand the
bank to enhance its capital adequacy ratio and then, on August 4, noticed the result of
the financial inspection of the bank - as of March 31, 1999 - conducted by the FSA.
Under these circumstances, the bank submitted, on August 6, to
Financial Reconstruction Commission (FRC) a report according to Clause 2, Article 68 of
the Law concerning Emergency Measures for the Reconstruction of the Function of the
Financial System (Law). Based on this report and financial condition 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.