Mizuho Financial and Mizuho Bank to Shut Down Due to Problems

The chairmen of Mizuho Financial Group Inc., one of Japan’s leading banking groups, and its Mizuho Bank banking unit will step down to take responsibility for a series of system failures, people familiar with the matter said on Friday.

The resignation of Mizuho Financial chairman Tatsufumi Sakai and Mizuho Bank chairman Koji Fujiwara comes as the Financial Services Agency plans to issue a new business improvement order for the two companies by the end November.

The sources also said that the finance ministry is considering ordering the companies to take action regarding their alleged violation of the foreign exchange and trade law in September.

Tatsufumi Sakai, President and CEO of Mizuho Financial Group Inc. (Kyodo)

The banking group company has started the process to choose Sakai’s successor with the aim of finalizing the choice by the end of this year, although the timeline could be pushed back to next spring if the current senior management chooses to put in place. Implement thorough preventative measures before putting back on leadership, the sources say.

Mizuho Bank, one of Japan’s mega-banks with branches across the country, has experienced eight system issues this year, affecting ATMs and causing other problems.

Regarding the problem of the September 30 system, which caused delays in some of its money transfers for foreign exchange operations, the Ministry of Finance believes that Mizuho Bank has not taken the necessary measures to prevent money laundering. money before currency remittances, the sources said.

The agency is expected to inform Mizuho Bank of its findings in the near future, following the investigation into the series of problems with the system.

The agency believes the problems are due to mismanagement by inexperienced operators, as the system itself does not appear to have major problems, people familiar with the matter said.

Although Mizuho Bank drew up preventative measures in June after encountering four system issues, the bank has since been hit with such issues four more times.

In June, Mizuho Bank announced pay cuts ranging from 10 to 50 percent for Sakai and 10 other executives to take responsibility for the issues.

Shortly before the salary cuts were announced, Fujiwara was due to resign, but the bank postponed the decision to replace him in the hope that preventative measures would progress.

Associated coverage:

Mizuho Bank hit by 8th system problem this year, delayed money transfers

Japanese financial regulators to oversee Mizuho Bank’s IT system

Japanese government to order Mizuho over banking system failures

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