The Finance Ministry on March 31 drafted new guidelines on inspecting financial institutions to increase transparency, following an eruption of scandals in which its inspectors allegedly received bribes for advance information.
Under the new guidelines, and in a break with its tradition of secrecy, the ministry would give financial firms advance information on when they will be inspected. The ministry would also compile the general information gathered from the inspections into a white paper format on a regular basis to give the public a better idea of what is going on, ministry officials said.
In the upcoming months, the ministry will develop ways to make the inspections themselves more effective and less time-consuming. The effort will include help from certified public accountants and increased data exchange with the Bank of Japan, which conducts its own probes.
One official said he expects that firms -- banks, insurers and brokerages -- will basically be given one to two weeks of advance notice so they have a rational amount of time to prepare.
At the same time, however, the ministry said it may conduct surprise inspections if necessary to check up on certain items, such as whether the financial firms are abiding by laws and regulations.
The ministry, which by the end of June will transfer its financial supervisory functions to a new agency, will also develop programs to let inspectors have opportunities to exchange views with inspectors from other countries, and let private-sector specialists take part in probes.