The Long-Term Credit Bank of Japan's latent losses exceeded its net worth as of Sept. 30, indicating that it effectively is insolvent, the Financial Supervisory Agency said Friday.The LTCB was solvent in March but became effectively insolvent partly because the bank had not made sufficient provisions for loan losses and its stockholdings have plunged in value, according to the findings from the FSA's bank inspection. The LTCB has a net worth of 160 billion yen and latent losses of 500 yen billon, FSA estimates show.At the end of March, it had 787.1 billion yen in net worth and 168.4 billion yen in latent losses. This means the bank was solvent even if the latent losses were counted. But the FSA believes the net worth should have been 274.7 billion yen smaller at the time if an appropriate amount of reserves had been put up against bad loans.As of the end of September, the bank's assets totaled 24.15 trillion yen. It had 4.62 trillion yen in problem loans: 3.3 trillion yen in "second category" loans, the least problematic kind; 800 billion yen in third category loans, which have a grave possibility of becoming irrecoverable; and 520 billion yen in fourth category, or irrecoverable, loans to firms that failed.The fourth category loans soared from zero as self-assessed by the LTCB and 137.3 billion yen as assessed by the FSA as of March. The LTCB had assessed its loans using a much less stringent standard than the FSA considers appropriate, FSA officials said.The FSA is inspecting 18 other major banks only up to their March activities -- it does not intend to assess their stockholdings as of September, FSA Commissioner Masaharu Hino said. The LTCB is to be placed under state control while the others will remain private firms, FSA officials explained.