(Provisional Translation)
April 11, 1999
Financial Reconstruction Commission
The Government of Japan
| Statement by the Minister Yanagisawa |
-- On the Kokumin Bank Limited --
- Today, I have received a report based on Article
68-1 of the Law concerning Emergency Measures for the Reconstruction of the Function of
the Financial System (the Law) from the Kokumin Bank Limited (the Kokumin Bank) which
indicated that "it is deemed that there is a possible danger that, in light of the
bank's business and financial conditions at present, the bank may be forced to suspend
repayment of its obligations including deposits."
- Based on the report and situation concerning the
Kokumin Bank such as cash flow of the bank, the Financial Reconstruction Commission (the
FRC) has decided, today, to place the Kokumin Bank's operations and management of its
assets under financial reorganization administrators pursuant to Article 8 of the Law*. The FRC has appointed Mr. Akira Tachimoto
(Certified Public Accountant), Mr.Hideki Matsushima (Lawyer), and the Deposit Insurance
Corporation (the DIC) as financial reorganization administrators for the Kokumin Bank. At
the same time, the FRC ordered them, pursuant to Article 14 of the Law, to draft a plan
concerning the Kokumin Bank's operation and management of its assets.
| * |
|
Since the Kokumin Bank will continue
its normal operations, the financial reorganization administrators will manage not only
the Kokumin Bank's assets but also its operations unlike a trustee in the corporate
reorganization procedure.
|
- By this measure, responsibilities of the Kokumin Bank's administration, operations, and
asset management belong exclusively to the financial reorganization administrators, and
the Kokumin Bank will continue its operations along the plan on the bank's operations and
asset management in an appropriate manner.
In addition, the Financial Supervisory Agency issued to the Kokumin Bank a management
improvement order based on Article 26 of the Banking Law, with a view to preventing the
deterioration of its asset quality. Thus, the Kokumin Bank is required to manage its
business in a sound manner.
- While the financial reorganization administrators are expected to find receiving
financial institution(s) for the Kokumin Bank as soon as possible, the FRC will make its
utmost efforts to protect depositors and others, and to maintain orderly financial system,
including setting up a public bridge bank, if necessary.
In addition, the Bank of Japan will provide the Kokumin Bank with funds based on Article
38 of the Bank of Japan Law, necessary for its daily operations such as repayment of its
deposits during the financial reorganization administrators' management, and the DIC is to
make financial assistance when the Kokumin Bank's business is transferred to receiving
financial institution(s) or to a public bridge bank.
- With this framework, all the liabilities of the Kokumin Bank, including all the deposits
and interbank transactions, are to be settled orderly and protected fully. In addition,
these loans which have been provided by the Kokumin Bank to sound borrowers in good faith
are to be maintained. Therefore, depositors and market participants are urged to be
reassured and remain calm.
Statement by
the Commissioner
