FSA: Let the regional banks fail, it’s Takenaka’s fault anyway

October 29, 2007
By Ken Worsley

With few signs that problems at Japan’s regional banks are clearing up, it seems that some members of the Financial Services Agency are encouraging the government to let the banks fail. This would allow for depositors to receive up to 10 million yen of funds in their accounts, as the Japanese government capped its deposit guarantees at that level in 2005.

What happened? The Nikkei tells us this:

Since 1991, 181 financial institutions have filed for bankruptcy protection. About 80% of the total, or 144 filings, were submitted from 1998 to 2002. Hakuo Yanagisawa served as financial services minister during much of this period. After Heizo Takenaka took over the post in September 2002, however, only Ashikaga Bank went belly up.

And then lets us know that there is ‘a view’ that Takenaka’s relaxed stance on regional banks led to sloppy management practices, which led to the problems we see today.

Good to see they’ve found someone to pin the problem on.

Filed Under Banking, Services