Resolution of Failed Financial Institutions

When a financial institution fails, DICJ may be appointed as a financial administrator under the Deposit Insurance Law (until March 2001, the Law concerning Emergency Measures for the Revitalization of the Financial System).

(1) Operations as a financial administrator

When a financial institution fails, the DICJ may be appointed as a financial administrator of the financial institution ordered for management (hereinafter referred to as “the financial institution under management”) in accordance with the Deposit Insurance Act (Act on Emergency Measures for the Revitalization of the Financial Functions until March 2001).

Of the financial institutions ordered to be placed under the management of a financial administrator, DICJ was appointed as the financial administrator for 8 banks, 2 shinkin banks, and 2 credit cooperatives. In cooperation with other financial administrators, DICJ managed the business of these financial institutions under management, including the execution of their operations, management and disposal of their assets, and selection of assuming financial institutions.

Below is a summary of the resolution of the financial institutions under management for which DICJ acted as the financial administrator.

(as of December 26, 2011)
Failed Financial Institutions Date of management order Date of business transfer agreement signed Date of business transfer Assuming Financial Institutions
Kokumin Bank Apr. 11, 1999 Mar. 7, 2000 Aug. 14, 2000 Yachiyo Bank
Kofuku Bank May 22, 1999 Oct. 6, 2000 Feb. 26, 2001 Kansai Sawayaka Bank
Tokyo Sowa Bank June 12, 1999 Jan. 25, 2001 June 11, 2001 Tokyo Star Bank
Namihaya Bank Aug. 7, 1999 July 28, 2000 Feb. 13, 2001 Daiwa Bank and Kinki Osaka Bank
Niigata Chuo Bank Oct. 2, 1999 Dec. 21, 2000
(Towa Bank signed on Dec. 22, 2000)
May 14, 2001
(Daishi Bank signed on May 9, 2001)
Taiko Bank, Daishi Bank, Hachijuni Bank, Higashi-Nippon Bank, Gunma Bank and Towa Bank
Nichinan Shinkin Bank Nov. 19, 1999 Oct. 20, 2000 Mar. 26, 2001 Nango Shinkin Bank
Kansai Kogin Credit Cooperative Dec. 16, 2000 Jan. 17, 2002 June 17, 2002 Kinki Sangyo Credit Cooperative
Chogin Tokyo Credit Cooperative Dec. 29, 2000 Dec. 17, 2002 Dec. 29, 2002 Hana Credit Cooperative
Ishikawa Bank Dec. 28, 2001 Mar. 28, 2002
( with BBJ )

Dec. 27, 2002
Mar. 24, 2003 (through BBJ)
Hokuriku Bank, Hokkoku Bank, Firs Bank of Toyama, Kanazawa Shinkin Bank, Noto Shinkin Bank
Sogo Shinkin Bank Jan. 25, 2002 Feb. 20 2002 June 10, 2002 Osaka Shinkin Bank
Chubu Bank Mar. 8, 2002 Mar. 28, 2002
( with BBJ )

Dec. 6, 2002
Mar. 3, 2003 (through BBJ)
Shimizu Bank, Shizuoka Chuo Bank,
Tokyo Star Bank
Incubator Bank of Japan Sep. 10, 2010 Apr. 1, 2011
( with 2nd BBJ )
Oct. 20, 2011
Dec. 26, 2011 AEON Bank (*)

(*) All shares of the 2nd BBJ held by DICJ were transferred to the AEON Bank.

(2) Operations involving banks under special public management

DICJ's operations involving banks under special public management in line with the Financial Revitalization Law include the following: (1) the work associated with DICJ's acquisition of shares of banks under special public management; (2) the provision of financial assistance in line with the Deposit Insurance Law; (3) the provision of loans needed to execute the operations of banks under special public management; and (4) compensation for losses incurred when executing the operations of banks under special public management.

After the enactment of the Financial Revitalization Law, the Long-Term Credit Bank of Japan (now the Shinsei Bank) and the Nippon Credit Bank (now the Aozora Bank) were subject to failure resolution under special public management, both of which were terminated the subject of special public management.

Assuming institutions

  • Long-Term Credit Bank: New LTCB Partners
  • Nippon Credit Bank: Soft Bank Group (consisted of Soft Bank, Orix and Tokio Marine)
◆Schedule from orders under special public management to the end.
  Long-Term Credit Bank Nippon Credit Bank
Decision date to commence special public management Oct. 23, 1998 Dec. 13, 1998
DICJ purchases the shares on the announcement Oct 28, 1996 Dec 17, 1998
1st stage of purchase of unsuitable assets using special financial assistance Aug. 16, 1999 Nov. 22, 1999
Memorandum on the Transfer signed by DICJ Sep. 28, 1999 Feb. 24, 2000
Basic Agreement on the Transfer signed by DICJ Dec. 24, 1999 June 6, 2000
Final Agreement on the Transfer signed by DICJ Feb. 9, 2000 June 30, 2000
Compensation for losses and purchase of shares Feb. 28, 2000 Aug. 31, 2000
Decision to end special public management by FRC Feb. 29, 2000 Aug. 31, 2000
Transfer and purchase of shares March 1. 2000 Sep. 1, 2000
Capital injection March 31, 2000 Oct. 3, 2000

(3) Operations of a bank under the special crisis management

The special crisis management (a decision for the DICJ to acquire the shares of a failed bank) specified in the Deposit Insurance Act may be applied, through the deliberation of the Council for Financial Crises chaired by the Prime Minister, as measures against financial crisis that could severely hinder the maintenance of the financial system in Japan or in the region where the insured financial institution conducts its business.
In such a case the DICJ, as designated by the Commissioner of the Financial Services Agency, can select and appoint directors, auditors, etc. of the relevant bank.

A decision to place the Ashikaga Bank under the special crisis management was made on November 29, 2003.   On July 1, 2008, the special crisis management of the Ashikaga Bank came to an end with the DICJ transferring all the Ashikaga Bank shares it had held to the transferee.
<Transferee of the Ashikaga Bank shares>
Ashikaga Holdings Co., Ltd. (a holding company established by a consortium led by Nomura Financial Partners Co., Ltd. and Next Capital Partners Co., Ltd to serve as an assuming financial institution of the Ashikaga Bank)

◆Key dates during the period between the decision of commencement and the completion of the special crisis management of the Ashikaga Bank
Decision of commencing the special crisis management November 29, 2003
Acquisition of all the shares by the DICJ December 1, 2003
Selection and appointment of the new management members December 16 & 25, 2003
Purchases of assets in accordance with the provisions of the Article 129 of the Deposit Insurance Act (1st – 4th) August 23, 2004
March 22, 2005
February 6, 2006
March 31, 2008
Conclusion of the share purchase agreement April 11, 2008
Financial assistance (purchase of assets and monetary grant) June 16 & 30, 2008
Transfer of shares (completion of the special crisis management) July 1, 2008

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