The president of the Long-Term Credit Bank of Japan told the Diet on Monday that he “believes” his bank is solvent, only to recant the statement later in the day.
In late unsworn testimony, Onogi said he “got carried away” in earlier testimony in regards to the LTCB’s liabilities and to an ongoing inspection being conducted by the Financial Supervisory Agency, adding that he has not heard about the inspection’s findings. “I got carried away in making the remark,” he told the Lower House committee.
He was referring to a comment in which he said: “Based on our own assessment, inspection by the Bank of Japan, and the findings so far in the ongoing inspection by the Financial Supervisory Agency, I believe I can say that our bank is not insolvent. As of the end of September, we estimate that our capital account will stand at 550 billion yen.”
In another statement earlier in the day, Onogi acknowledged that the bank will not be able to pay a promised 1 percent dividend on shares purchased by the government in March with 176.6 billion yen in public funds. “We did promise the 1 percent dividend when we received public funds in March,” he said. “But I would like to seek people’s understanding toward our decision not to pay out the dividend in accordance with our restructuring plan.”
Nevertheless, he asked for more public money, apologizing for management failure and pledging to carry out a recently announced restructuring plan. “I am not asking for public funds to help us survive,” he said, “but to avoid the unimaginable impact that our possible failure might bring on our 8,000 corporate customers, including 4,000 small and midsize enterprises, as well as on the financial system here and abroad.”
Onogi, together with the current and former heads of three LTCB-affiliated nonbank financial institutions, were summoned as unsworn witnesses before the Lower House’s special committee on financial stabilization.
In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.