(Provisional Translation)
May 22, 1999
Financial Reconstruction Commission
The Government of Japan
| Statement by the Minister Yanagisawa |
-- On the Kofuku Bank Ltd. --
- Yesterday, the Financial Reconstruction Commission
(the FRC) received a report based on Article 68-2 of the Law concerning Emergency Measures
for the Reconstruction of the Function of the Financial System (the Law) from the Kofuku
Bank Ltd. which indicated that git is recognized that there is going to be 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 the situation concerning
the bank such as its financial conditions , the FRC has decided, today, to place the
bank's operations and management of its assets under financial reorganization
administrators pursuant to Article 8 of the Law*. The FRC has appointed, pursuant to Article 11
of the Law, Mr. Noboru Unabara (certified public accountant), Mr. Yoshio Kurihara
(lawyer), and the Deposit Insurance Corporation (the DIC) as financial reorganization
administrators for the Kofuku Bank. At the same time, the FRC ordered them, pursuant to
Article 14 of the Law, to draft a plan concerning the bank's operation and management of
its assets.
| * |
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Since the Kofuku Bank will continue
its normal operations, the financial reorganization administrators will manage not only
the bank's assets but also its operations unlike a trustee in the corporate reorganization
procedure.
|
- By this measure, responsibilities of the bank's administration, operations, and asset
management belong exclusively to the financial reorganization administrators, and the bank
will continue its operations along the plan concerning the bank's operations and asset
management in an appropriate manner under the financial reorganization administrators.
In addition, yesterday, the Financial Supervisory Agency issued to the bank a management
improvement order based on Article 26 of the Banking Law, with a view to preventing the
deterioration of the bank's asset quality through requiring the bank to manage its
business in a sound manner.
- While the financial reorganization administrators are expected to find receiving
financial institution(s) for the 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 bank with funds based on Article 38 of the
Bank of Japan Law, necessary for the bank's daily operations such as repayment of its
deposits during the financial reorganization administrators' management, and the DIC is to
make financial assistance when the bank's business is transferred to receiving financial
institution(s) or to a public bridge bank.
- With this framework, all the liabilities of the 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 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
