Today the Prime Minister decided to place the Long-Term Credit Bank of Japan, Ltd. (LTCB)

　　　　　　　　　　　　　　　　　　　　　　　　　　　  　(Provisional translation)
                                                                   October 23, 1998
                                                       Financial Supervisory Agency
                                                            The Government of Japan
 
　　　　　　Statement by the Commissioner


1－(1)   Today the Prime Minister decided to place the Long-Term Credit Bank of
Japan, Ltd. (LTCB) under special public management (temporary nationalization), 
based on the report submitted by the LTCB to the Prime Minister according to "Law
 concerning Emergency Measures for the Revitalization of the Functions of the 
Financial System." 

1－(2)   While the nationalized LTCB will continue its normal operations, I 
issued to the LTCB, immediately after receiving the bank's report, a management 
improvement order based on Article 26 of the Banking Law, with a view to preventing
the deterioration of the quality of the LTCB's assets.  Thus, the LTCB is required
 to manage its business in a sound manner.

1－(3)   Further, the Financial Supervisory Agency (the Agency) intends to explain 
fully, in collaboration with the Ministry of Finance and the Bank of Japan, the 
contents of this decision on the temporary nationalization of the LTCB to overseas
supervisory counterparts, in order that the market participants at home and abroad 
will accurately understand the thrust of the decision.

2－(1)   Meanwhile, "Financial Function Early Strengthening Law" took effect today.  
Following this, I received an instruction from the Prime Minister that the Agency 
should, in the principle of fair financial supervision based on clear rules, 
promptly take supervisory/inspection measures that are effectively linked to this
 Law, in order for the Law to produce concrete results.

2－(2)   Following the instruction from the Prime Minister, the Agency will make 
use of its supervisory power in an appropriate manner through the strengthening of 
on-site inspection and off-site monitoring, strict enforcement of the Prompt 
Corrective Action, etc.  With these efforts, the Agency intends to expeditiously 
strengthen the Japanese financial system by ensuring sound management of individual 
financial institutions.  The Agency will thereby make its utmost efforts to protect 
depositors and others, to maintain orderly financial and payment system, and to 
stabilize the financial markets at home and abroad.
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