Statement by the Governor concerning Incubator Bank of Japan
September 10, 2010
Bank of Japan
- We have been informed today by the Japanese Financial Services Agency (FSA) that Incubator Bank of Japan (IBJ) was ordered to suspend a part of its business under the Banking Act, as well as to place its operations and asset management under a financial administrator pursuant to the Deposit Insurance Law, and the Deposit Insurance Corporation of Japan (DICJ) was appointed as the financial administrator for IBJ.
- The FSA explained that (1) deposits up to a total of 10 million yen principal plus its interest per depositor will be protected by the Deposit Insurance System (DIS), (2) the portion of principal in excess of 10 million yen plus its interest will be repaid at the earliest by the estimated proceeds payment under the DIS to cover immediate needs for IBJ's depositors, and (3) IBJ, based on its business model, does not carry out settlement function as it provides neither deposits for payment and settlement nor ordinary deposits for its customers, and IBJ does not raise funds from inter-bank money markets.
- Japan's financial system has remained stable as a whole. And public understanding on the DIS has been deepened steadily. Furthermore, based on IBJ's peculiar business model described above, the Bank of Japan considers that the failure of IBJ does not pose adverse impact on the stability of Japan's financial system.
- The Bank of Japan will continue to carefully monitor the developments of financial markets and financial system. And the Bank of Japan, as a central bank, will make utmost efforts to ensure the stability of Japan's financial system including temporary funding support to DICJ, in close coordination with the government and the DICJ.