(Provisional Translation)
June 12, 1999
Financial Reconstruction Commission
The Government of Japan
Statement
by the Minister Yanagisawa |
--
On the Tokyo Sowa 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 Tokyo Sowa
Bank, Ltd. which indicated that “it 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. Makoto Suzuki (lawyer), Mr. Katsuo Wajiki (certified public
accountant), and the Deposit Insurance Corporation (the DIC) as financial reorganization
administrators for the Tokyo Sowa 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.
| * |
Since the Tokyo Sowa 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
