Marking the biggest collapse in the nation's financial industry, ailing Hokkaido Takushoku Bank announced Monday its de facto failure by saying it will transfer its operations to Hokkaido-based North Pacific Bank and other financial institutions.
Sources said the Bank of Japan extended special loans on the same day because Hokkaido Takushoku was having difficulty raising funds on the interbank money market amid substantial withdrawals of deposits.
Finance Ministr Hiroshi Mitsuzuka and Hokkaido Gov. Tatsuya Hori urged depositors not to panic and not to make a run on the bank. "I strongly hope depositors will take a sensible course of action," Mitsuzuka told a news conference, adding that all deposits will be protected. This promise was also backed up by the BOJ.