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2013年12月31日 (火)

みずほ追加処分 経営の刷新で一から出直せ

The Yomiuri Shimbun December 30, 2014
Mizuho banking group must revamp corporate management, compliance
みずほ追加処分 経営の刷新で一から出直せ(12月30日付・読売社説)

Mizuho Financial Group Inc. will be unable to refurbish its tarnished public image unless it thoroughly reforms its erratic corporate structure and revamps its method of conducting business.

Because the megabank’s top management failed to address problematic loans extended to gangsters from its lending affiliate, the Financial Services Agency has ordered a second round of punitive actions for Mizuho Bank and Mizuho Financial Group, the bank’s holding company.

In addressing the loans to gangsters, the financial watchdog ordered the nation’s second-largest banking group to suspend loans through the affiliate for a month, called for clarification of management responsibility and demanded the strengthening of corporate governance. The FSA’s order came only three months after it issued its first round of business improvement instructions to Mizuho in September.

Mizuho Bank initially claimed its top management was unaware of the loan irregularities, saying the matter had been left to directors in charge. It was later revealed, however, executives of the bank, including the president, actually were in a position to know about the loans, as they had received reports from subordinates.

It is highly unusual for the FSA to mete out administrative punishments twice against a financial institution in such a short period of time. The agency’s action appears aimed at pressuring Mizuho to terminate irresponsible actions by its management.

Mizuho Bank is scheduled to submit a business improvement plan to the FSA by Jan. 17. To ensure that transactions with gangsters do not recur, the bank must come up with effective preventive measures.

Mizuho’s response to the administrative punishments, however, has been problematic. Although Takashi Tsukamoto, chairman of Mizuho Financial Group, will step down at the end of March to take responsibility for the loan scandal, Mizuho Bank President Yasuhiro Sato will remain in office, while concurrently holding on to the post of president of Mizuho Financial Group.

End vertical segmentation

At a press conference Thursday, Sato said, “My responsibility is to put into place a corporate governance structure that global markets can trust.”

In citing reasons for taking punitive steps this time, the FSA lambasted Mizuho, pointing out that the bank’s board of directors had “failed to engage in substantial discussions and had fallen short of functioning properly.” Can Mizuho drastically reform its management structure while keeping the “Sato regime” in place?

Ever since its launch in 2000 through the merger of Dai-Ichi Kangyo Bank, Fuji Bank and Industrial Bank of Japan, Mizuho has faced a number of serious problems, including large-scale computer system failures.

The sequence of irregularities can be attributed mainly to the banking group’s failure to earnestly address the task of eliminating the prevailing “vertical segmentation,” as there has been insufficient collaboration between leaders hailing from the three merged banks, a problem noted by analysts in the past.

Breaking down the old, home-centered mind-set of Mizuho is essential. The balancing act of allocating posts of its top management personnel affairs among those from the three former banks and the bad habit of avoiding interfering with each other must be brought to an end.

In line with the FSA’s instructions, Mizuho will introduce a management supervisory committee, the first to be set up in a megabank, and beef up management oversight by external directors. What is at stake is whether Mizuho can sweep away its stuffy management structure by introducing fresh faces from outside.

The Mizuho problem also shone the spotlight on the FSA’s methods of inspecting banking institutions. This is mainly because the watchdog’s regulators in the first round of inspections blindly accepted Mizuho’s explanations on the loans to gangsters, incurring criticism for their sloppy inspection methods.

To regain public trust, the FSA should improve its inspection techniques significantly.

(From The Yomiuri Shimbun, Dec. 30, 2013)
(2013年12月30日01時25分  読売新聞)


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