Terunobu Maeda, president of Mizuho Holdings Inc., plans to take a 50 percent pay cut over a six-month period to take responsibility for the computer fiasco that threw the group’s operations into chaos during its April relaunch, informed sources said Tuesday.

Mizuho Holdings also plans to impose disciplinary pay cuts of between 15 percent and 30 percent on more than 100 senior Mizuho employees, the sources said.

The former Dai-Ichi Kangyo Bank director who was in charge of developing the computer system will resign from his post with the group.

The Financial Services Agency was to issue the Mizuho financial group with a business improvement order as early as Wednesday.

“I want to make a decision (on the order) as early as possible after examining Mizuho’s report” on the problem, Financial Services Minister Hakuo Yanagisawa said Tuesday. “The main cause of the computer trouble was the top management’s lack of awareness of the risks of the computer system.”

Mizuho Holdings submitted a report to the FSA later in the day addressing the causes of the trouble, measures to prevent a recurrence and management responsibility.

Yanagisawa said computer system integration is something that should be seen as an advantage to a banking group, but it regrettably became “a negative factor.”

The massive computer failure occurred following the April 1 launch of Mizuho Bank and Mizuho Corporate Bank under Mizuho Holdings. The two Mizuho banks were created through a merger of Dai-Ichi Kangyo Bank, Fuji Bank and Industrial Bank of Japan.

Customers were double-billed for utilities charges and most of the banks’ 7,000 automated teller machines malfunctioned.

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.