The Lower House Financial Affairs Committee will ask Mizuho Bank President Yasuhiro Sato to appear before it Wednesday to explain the lender’s shady loans to underworld groups, according to sources.
The committee will question Sato about the bank’s long-term failure to deal with loans extended to yakuza and other “anti-social” elements through a consumer finance affiliate of parent company Mizuho Financial Group Inc.
Sato will be asked to explain why Mizuho incorrectly told the Financial Services Agency last year that the bank’s directors were unaware of the loans to mobsters, and that an executive in charge of compliance was the highest-ranking official in the know.
With similar loans uncovered at other financial institutions, the Lower House panel plans to invite more industry leaders for questioning on efforts to remedy the problem, the sources said.
They are expected to include Takeshi Kunibe, president of Sumitomo Mitsui Banking Corp. and chairman of the Japanese Bankers Association; Masaaki Tani, president of Bank of Fukuoka Ltd. and chairman of the Regional Banks Association of Japan; and Kazuhiro Omori, head of the Japan Consumer Credit Association.
Mizuho’s incorrect explanation to the FSA, which launched a probe into the matter last December, formed the basis for a business improvement order it issued to the bank in September.
It subsequently emerged, however, that information on the loans had been reported to Mizuho’s board of directors.
The financial industry watchdog initiated a reinvestigation of the bank Tuesday and aims to decide by the end of the year whether to impose additional punitive measures.
The FSA has also started on-site inspections of the nation’s other two mega-banks, Sumitomo Mitsui Banking Corp. and Bank of Tokyo-Mitsubishi UFJ Ltd., to examine their legal compliance systems.