Statement by the Governor concerning Ashikaga Bank
November 29, 2003
Bank of Japan
- Ashikaga Bank informed us today that it had a negative net worth as of end-September 2003, and that there was a risk of suspending repayment of deposits.
The Prime Minister held a meeting of the Financial System Management Council and determined the necessity of temporarily nationalizing Ashikaga Bank pursuant to Article 102 of the Deposit Insurance Law.
- Ashikaga Bank, as a temporarily nationalized bank, will carry out operations as appropriate and seek to transfer its business to an assuming financial institution as soon as possible with financial assistance from the Deposit Insurance Corporation of Japan.
- Pursuant to Article 38 of the Bank of Japan Law, the Bank of Japan, upon the request from the Commissioner of the FSA and the Finance Minister, decided at today's Policy Board meeting to provide necessary liquidity to Ashikaga Bank in order to support the continuation of its business until temporary nationalization is terminated.
- Ashikaga Bank will continue normal operations, and all of the bank's obligations, including deposits and interbank borrowings, will be performed smoothly.
Through these measures, the Bank of Japan believes that financial stability will be maintained, especially in the region in which Ashikaga Bank operates.
The Bank of Japan, in close coordination with the government, will continue to make utmost efforts to ensure the stability of Japan's financial system.