There were grovelling apologies all round from the president and heads of Mizuho, Japan’s second biggest bank, after revelations they had extended almost loans worth the equivalent of 1.5 million euros to Japanese gangsters, known in the country as the ‘Yakuza’.
The Financial Services Agency, Japan’s financial regulator, has already sanctioned 54 Mizuho executives. An inspection discovered a trail of small car loans made by Orient Corp, a consumer financing company affiliated to and funded by the bank, to people involved in organised crime.
Mizuho’s president has submitted a business improvement report to the FSA but despite the huge level of public embarrassment and potential loss of reputation, he will not step down.
The FSA is widening the net to include the country’s top lender Mitsubishi UFJ and has given notice of an inspection. Sumitomo Financial Group also received notice.
The case puts an uncomfortable spotlight once again on ties between corporate Japan and the country’s criminal underworld.