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FSA to keep an eye on Shinginko Tokyo, should it survive

March 12, 2008
By Ken Worsley


Shinginko TokyoJust in case you might have been considering applying for a loan at the cash machine otherwise known as Shinginko Tokyo, it has been announced that the Financial Services Agency intends to keep a “closer eye” on the bank’s lending activities, according to the Nikkei.

Shinginko Tokyo, which apparently loaned money to some 2,300 firms that went bust between April 2005 and January 2008, now lists 28.5 billion yen of its initial 100 billion yen of capitalization as unrecoverable. The bank is also running a deficit of 93.6 billion yen.

The Nikkei quotes Yoshinori Shimizu, a professor at Hitotsubashi University, as saying:

Financial authorities should probably have inspected or urged (ShinGinko Tokyo) to improve its business model before the bank’s financial strength was weakened this much.

That would have been a good idea (but then again, it’s just taxpayer money, right?) The bank is seeking an additional 40 billion yen capital injection from the city of Tokyo, which is somehow actually being considered - as are criminal charges against former members of the bank’s management. With the FSA watching, Shinginko Tokyo may no longer be synonymous with pure robbery, but the good times might not be over just yet - head down to Otemachi to hand in your application for a loan.

At Shinginko Tokyo’s opening ceremony in March 2005 (pictured), Tokyo Governor Ishihara Shintaro said, “This bank is absolutely essential in order to tap into Tokyo’s potential. I hope the entire Tokyo metropolis will get behind it.”

Potential what? Perhaps the governor meant that the citizens of Tokyo would be getting under the bank.

Filed Under Banking, Finance, Japan, Politics 

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Comments

11 Responses to “FSA to keep an eye on Shinginko Tokyo, should it survive”

  1. Adamu on March 13th, 2008 12:03 pm

    I was amazed to learn from today’s Nikkei that the FSA has a “practice” of not performing on-site inspections of banks in their first three years of existence. Considering that the FSA has shown no shyness in acting against the mega-banks or brokerages for the slightest of infractions (and as a result has the entire industry on edge in fear of violating the new Financial Instruments and Exchange Law), they should have been more than aware of this nightmarishly mismanaged monstrosity of a bank. But I guess that would have meant locking horns with Ishihara and his band of thugs.

  2. Ken Worsley on March 13th, 2008 1:00 pm

    Considering that the FSA has shown no shyness in acting against the mega-banks or brokerages

    Depends on the case…there have been instances where they’ve caught mega banks selling lists of bad loans to organized-crime connected “collection agencies,” but that never hit the news nor brought a punishment.

  3. Andrew on March 13th, 2008 2:17 pm

    Adamu, could you copy the text of Nikkei where it says about the practice of not inspecting banks during their first 3 years since the opening? Or send it to my email address??

  4. Andrew on March 13th, 2008 3:29 pm

    Adamu, a friend just sent me the article, thanks anyway!

    Congratulations to the author of the blog! great job!! keep it up!!

  5. KH on March 13th, 2008 4:38 pm

    This Shinginko Tokyo mess is deplorable, and Ishihara is probably lucky that other things are going on right now to distract people from how bad he’s f*cked up with this.

    Will this get the taxpayers angry? It’s about time. And this man wants to waste money on bringing the Olympics here?

  6. Ken Worsley on March 13th, 2008 11:23 pm

    KH, the 2016 Tokyo Olympics literally can’t happen anyway. 2008 in China - they won’t be back in Asia that fast. 2012 is London, so South or North America has a lock on 2016, unless Africa can get a bit together. I think all talk has faded on the idea, despite the “campaign” flags I see outside my local fire station.

  7. Ken Worsley on March 14th, 2008 1:06 pm

    And it just keeps getting better: Apparently 20% of the firms that money was lent to have their headquarters outside of Tokyo.

    http://www.nni.nikkei.co.jp/AC/TNKS/Nni20080314DA4J3145.htm

    TOKYO (Nikkei)–More than 20% of the total number of loans and loan guarantees extended by ShinGinko Tokyo were, as of the end of December, made to companies whose head offices are not in the capital, it was discovered during a session of the Tokyo metropolitan assembly on Friday.

    The finding contradicts the purpose for which the bank was established by the Tokyo Metropolitan Government in 2005 with 100 billion yen in capital — helping the city’s small and midsize firms.

  8. KH on March 14th, 2008 3:19 pm

    yeah, I agree, I don’t think the Olympics are possible for 2016. It’s more of a distraction than anything else.

    People should just start invoicing the Tokyo Government for their share of what Shinginko has lost.

  9. Ken Worsley on March 14th, 2008 6:05 pm

    People should just start invoicing the Tokyo Government for their share of what Shinginko has lost.

    Good luck with that!

  10. Trans-Pacific Radio » Headless BOJ, Government Waste, KFC Price Rises, and Banks in Trouble: TPR News for Friday, March 21, 2008 :: Independent Podcasts from Tokyo, Japan - Japanese News, Politics, Business and Economy on March 21st, 2008 5:46 pm

    […] for a loan at the cash machine otherwise known as ShinGinko Tokyo, it has been announced that the Financial Services Agency intends to keep a “closer eye” on the bank’s lending activities, according to the […]

  11. DPJ to push for sale of Shinginko Tokyo? Japan Economy News & Blog - Business, Economy, Real Estate, Marketing and Economic Reports on July 17th, 2009 12:06 am

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