Return
| (Provisional Translation) May 22, 1999 Financial Supervisory Agency The Government of Japan |
Statement by the Commissioner |
― On the Kofuku Bank Ltd. ―
| 1. | In view of the low level of the capital adequacy
ratio of the Kofuku Bank Ltd. at the end of March, 1999, which reflects the result of the
financial inspection of the bank - as of September 30, 1998 - conducted by the Financial
Supervisory Agency (FSA), the FSA issued an order of Prompt Corrective Action to the bank
on May 14, 1999, pursuant to Article 26 of the Banking Law and Article 3-3 of the
Financial Function Early Strengthening Law. Specifically, the FSA required the bank to
choose among the following corrective measures and quickly implement them: significant
increase in capital, drastic curtailment of business, merger, or closure of banking
business, etc. |
| 2. | Following the above-mentioned order, the FSA
received, on May 21, a report from the bank that it would close its banking business. 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, 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 the bank's submission of the report to the FRC mentioned above, a
management improvement order based on 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. |
| 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. |