Financial giant Mizuho Holdings Inc. on Wednesday officially announced punitive measures for 117 senior employees responsible for the massive computer glitches that marred the April launch of two new banks under the banking group.
Mizuho Holdings President Terunobu Maeda said he and two other top executives — Mizuho Bank President Tadashi Kudo and Mizuho Corporate Bank President Hiroshi Saito — would take a 50 percent pay cut over a six-month period.
Another 114 senior employees will swallow disciplinary pay cuts of between 15 percent to 30 percent to take responsibility for the glitches, which included double-billing and transaction delays.
Four former chief executive officers of the Mizuho group, who became special advisers, stepped down, Maeda said.
An executive who was in charge of computer systems was demoted and subsequently resigned.
The resignations were effective Monday.
The set of reprimands are the largest for any banking firm in response to a scandal or other trouble.
Mizuho added that the computer problems, which affected millions of transactions and took nearly a month to fully sort out, caused at least 1 billion yen in damages to customers.
Executives said they may push back plans to completely integrate the banking giant’s computer systems by next April.
The delay is bound to cause further jitters among customers questioning the feasibility of Mizuho’s full integration. In April, Dai-Ichi Kangyo Bank, Fuji Bank and the Industrial Bank of Japan merged to create the two banks that make up the banking group — the world’s largest in terms of assets.
Maeda explained that the expected delay in the full integration of Mizuho computer systems is needed to prevent any recurrence of the April nightmare.
“We have three months’ work to catch up on,” he said. “We want to make sure that everything goes without a hitch this time. Otherwise we will really lose customer trust.”
Executives said they have yet to assess whether and how much the computer glitches will push back the full integration at Mizuho Bank, the group’s commercial bank. Currently, the three component banks’ computer systems are linked by relay computers.
During Wednesday’s news conference, executives went back and forth on where full responsibility lay for the fiasco.
An in-house investigation showed that sufficient tests were not carried out before the April 1 startup of the system, and that top executives lacked proper realization of the risks involving computer integration.
Mizuho’s three former chief executive officers did not even know that a full test to see if the computer systems worked had been implemented, Maeda said.
“The officer in charge of computer systems did not think the glitches that appeared during the tests could not be overcome . . . and no information to the contrary was passed on,” Maeda said.
The atmosphere right after the merger may have made bankers “reluctant” to report problems, he said.
But he added that no decision will be made concerning the retirement allowances for the three former CEOs.
“It’s hard to punish those who have quit. Plus, there is the custom that you pay retirement allowances. It’s supposed to reflect all the contributions you make over the years,” he said, adding that he was not sure if the computer system problems should be an issue.
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