- Mar. 25, 2019
- Mar. 15, 2019
- Mar. 15, 2019
December 13, 1998
Bank of Japan
1. We have today been informed by the Nippon Credit Bank that the Prime Minister*1 has notified it of his decision to temporarily nationalize the bank pursuant to the "Law Concerning Emergency Measures for the Revitalization of the Functions of the Financial System" (hereafter the "Revitalization Law"). We have also been informed of this fact by the Government.
2. In April last year, the Nippon Credit Bank announced a comprehensive restructuring package including capital enhancement through the issuance of preferred and common shares. In response to a strong request from the Government, the Bank of Japan agreed to use the money it had contributed earlier to the "New Financial Stabilization Fund"*2 to subscribe for the preferred shares; private financial institutions subscribed for the common shares and also preferred shares. Since then, the bank has endeavored to streamline and restructure its business with support from related parties. To our regret, according to the recent inspection conducted by the Financial Supervisory Agency, and against the background of a continuing deterioration in the economy, it was found that the bank would be insolvent as of the end of March this year. Consequently, the decision was made today to temporarily nationalize the bank.
3. In accordance with the Revitalization Law, the Deposit Insurance Corporation will temporarily acquire all shares of the Nippon Credit Bank and provide necessary support including the extension of loans, the purchase of assets, and the extension of grants to cover losses. Through these measures, the bank will continue operations as a "temporarily nationalized bank". Under this arrangement, all obligations of the bank, including deposits, debentures, interbank borrowings, and derivative transactions, will be performed smoothly.
4. The Bank of Japan strongly hopes that the restructuring process of the Nippon Credit Bank be executed promptly in accordance with the Revitalization Law, and that temporary nationalization will be completed as soon as possible. Meanwhile, we will continue to make every effort, in cooperation with the Government, to ensure the stability of the Japanese financial system.