(Excerpt)
(Tuesday, June 3, 2025, 8:38 am to 8:47 am)
- Q.
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I have a question about Iwaki Shinkumi Bank (credit cooperative). Regarding the fraudulent financing issue, the report published by the third-party committee on May 30 pointed out that there were cases in which important facts were concealed and false explanations were given during the investigation. It is also mentioned that there were attempts to conceal details in reporting to the Local Finance Bureau based on the judgment of the bank’s headquarters. How do you perceive the bank’s stance?
Also, what are your thoughts on ensuring the effectiveness of measures to demand improvements in such financial institutions?
- A.
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First, I understand that the third-party committee’s investigation report released on the 30th of last week severely criticized the bank’s uncooperative attitude during the investigation, including the destruction of important documents, and that such points were explained at the time of the announcement. While the report does mention that the investigation was voluntary and was unable to obtain sufficient cooperation, we find it deeply regrettable that Iwaki Shinkumi Bank still has no apparent attitude to clarify the truth, and we strongly urge the bank to reflect deeply on this matter.
Additionally, although separate from the third-party committee’s investigation, there were reports that contradicted the facts, such as claiming that an internal investigation had been conducted despite it did not conduct, in response to the request for a report issued by the Local Financial Bureau in November last year. Although corrections were made to the report subsequently, it is extremely regrettable that accurate reports were not made from the outset. We promptly issued a request for reporting in February of this year, demanding clarification of the circumstances that led to the submission of a report that differed from the facts.
The Financial Services Agency (FSA) has begun on-site inspection to clarify the full details of this case and will continue to thoroughly confirm and verify the facts.
Furthermore, to ensure the effectiveness of the business improvement order, we believe it is necessary to improve the organizational culture of the bank, which has been identified as the underlying cause of the series of irregularities and the uncooperative response to the investigation by the third-party committee.In the business improvement order issued on the 29th of last week, we have also requested a fundamental review of the bank’s management structure and organizational culture, including the clarification of management responsibility and the pursuit of responsibilities from both civil and criminal perspectives.
We are aware that the bank has already announced that seven members, including the chairman, have resigned, and that it will renew its management structure by appointing executives from the Shinkumi Federation Bank and hiring external personnel with expertise in internal management.
The FSA will continue to conduct on-site inspections and other measures to confirm facts. At the same time, while taking into account the bank’s issues pointed out by the third-party committee, the FSA will steadily pursue responsibilities from both civil and criminal perspectives. Additionally, the FSA will strongly instruct the bank in fundamentally reviewing its management structure and improving its operations, and will rigorously confirm and verify the progress of such efforts.
