Japan to inspect big banks after Mizuho mob links

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Associated Press

Posted on October 30, 2013 at 12:04 AM

Updated Wednesday, Oct 30 at 12:30 AM

TOKYO (AP) — Japan's Financial Services Agency plans inspections of the country's biggest banks after finding loans linked to organized crime at Mizuho, the country's No. 2 lender.

The regulator said in a notice that it will inspect Bank of Tokyo-Mitsubishi UFJ, the country's No. 1 bank in terms of assets, Mizuho Financial Group and No. 3 bank Sumitomo Mitsui Bank.

The FSA inspections will focus on compliance and risk management. The move comes after Mizuho's announcement that the chairman of its banking business will resign and top executives will have pay docked over more than 200 million yen ($2 million) in loans to organized crime.

The loans, reported to Mizuho's board in early 2011, were issued by consumer finance affiliate Orient Corp. A probe faulted Mizuho for failing to crack down sooner.

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