Terunobu Maeda, president of Mizuho Holdings Inc., told the Diet on Tuesday that the banking group acknowledges its grave responsibility for computer glitches that have led to depositors being double billed and ATMs malfunctioning.
Speaking before a House of Representatives committee, where he was summoned as an unsworn witness, Maeda again apologized for the 2.5 million cases in which depositors were unable to move their money.
The problems began April 1, when the world’s biggest financial group was launched.
“We deeply apologize for the tremendous trouble that we have caused,” Maeda told the Lower House Committee on Financial Affairs.
The occasion marked the first time that the president has spoken publicly about the series of computer glitches that have disrupted the operations of Mizuho Bank and Mizuho Corporate Bank. Thousands of customers have been double billed as a result of the problems, while ATMs across the nation failed to operate properly.
Commenting on the group’s responsibility, Maeda said, “We will do whatever is deemed necessary and appropriate” after implementing measures to prevent any recurrence of the problems.
In more than three hours of testimony, Maeda said that the number of delayed money transfers that have not yet been settled at the two banks totals 150,000, as opposed to the 100,000 he had reported earlier. He said it would take a week to resolve the problem.
Earlier in the day, Financial Services Minister Hakuo Yanagisawa said the government may order Mizuho Holdings to improve its operations in relation to the fiasco.
“I wouldn’t say such an order is not on the table,” Yanagisawa told a news conference.
He said the government will decide on what action to take after receiving a report from the banking group on the problems at the banks.
The three original banks were Dai-Ichi Kangyo Bank, Fuji Bank and the Industrial Bank of Japan.
Yanagisawa said the Financial Services Agency has asked Mizuho to submit a report by Wednesday. But he said it may take some time before the FSA can decide on any action, because the problem involves many technical details.
“I’m not sure how well-versed the FSA officials are” in computer systems, Yanagisawa said.
He also said he does not know how soon Mizuho will be able to operate normally.
Mizuho ‘slacking off’
Prime Minister Junichiro Koizumi on Tuesday blamed Mizuho Holdings Inc. for the protracted computer trouble that has crippled its automated teller machine and billing systems.
“(Mizuho) has been really slacking off,” Koizumi told reporters at his official residence.
Chief Cabinet Secretary Yasuo Fukuda also lashed out at Mizuho’s management.
“The management is responsible for bringing about social and economic disruption,” the top government spokesman told reporters. “The problem is very regrettable because a motto of banks should be ‘safety and freedom from anxiety.’ “
Their comments came before Mizuho Holdings President Terunobu Maeda was summoned to a House of Representatives committee in the afternoon to give an account of the problem involving Mizuho Bank and Mizuho Corporate Bank.
The trouble, in which ATMs failed and Mizuho customers were double-billed for utility charges, came with the April 1 launch of the two Mizuho banks after the merger of three banks under Mizuho Holdings.
April is the first month of the fiscal year.
Ratings intact, for now
The ongoing computer problems at Mizuho Bank and Mizuho Corporate Bank will not immediately hurt their credit ratings, Standard & Poor’s Corp. said Tuesday.
The U.S. credit-rating agency said the computer system breakdowns “would not result in an immediate downgrade of the banks.” It added, however, that if the difficulties were to continue for a prolonged period they would indeed damage the ratings.
S&P said it is currently unable to determine whether the Mizuho group has sustained lasting damage, adding it will monitor its efforts to recover from the fiasco.
The agency gave the Mizuho banks a BBB long-term rating, negative outlook and an A-3 short-term rating, following their creation April 1 via the integration of Dai-Ichi Kangyo Bank, Fuji Bank and the Industrial Bank of Japan.
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