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Mizuho Bank to face one-month suspension of some affiliated loans

Kyodo

The Financial Services Agency will order Mizuho Bank to suspend some of its affiliated loans for a month over its involvement in lending to members of organized crime groups, FSA sources said Wednesday.

The FSA will also issue business improvement orders to the Mizuho Financial Group Inc., the sources said, adding the official announcement will likely come Thursday.

The order by the financial watchdog will follow one issued to Mizuho Bank in September to improve operations after it left the problem unattended for more than two years despite its knowledge of the matter.

The FSA decided to take additional punitive action over the loans to crime groups as the holding company was considered responsible for failing to prevent a false report from being submitted to regulators by the unit bank, the sources said.

Mizuho Bank originally said its top management had not been aware of the issue, but it later reversed its claim, with President Yasuhiro Sato saying at a news conference that he and former President Satoru Nishibori were in a position to know about the loans.

In late October, the bank submitted a report compiled by a third-party panel that said it found no evidence of a coverup. The FSA launched an additional probe into Mizuho Financial Group and Mizuho Bank on Nov. 5 to verify the contents of the report.