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| (Provisional Translation) October 2, 1999 Financial Reconstruction Commission The Government of Japan |
Statement by the Minister Yanagisawa |
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On the Niigata Chuo Bank,
Ltd. --
| 1. | Yesterday, the Financial
Reconstruction Commission (the FRC) 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 Niigata Chuo Bank, Ltd. 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." |
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| 2. | Based on the report and the
situation concerning the bank such as its cash flow, 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. Koichi Matsumura (certified
public accountant), Mr. Tetsuya Sunada (lawyer), and the Deposit Insurance Corporation
(the DIC) as financial reorganization administrators for the Niigata Chuo 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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| 3. | 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. |
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| 4. | 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. |
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| 5. | 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 -- On the Niigata chuo Bank, Ltd.--