TOKYO Dec 25 Japan's banking regulator is set
to order Mizuho Financial Group to suspend part of its
operations for a month as an additional penalty over its loans
to organised crime syndicate members, sources familiar with the
matter said on Wednesday.
The Financial Services Agency (FSA) plans to impose a
month-long suspension of Mizuho's core banking unit's loan
business with consumer credit companies, where the problem
transactions took place, said the sources, who declined to be
identified as they are not authorised to discuss the matter.
Banking examiners have been conducting a second round of
investigation into Mizuho after Japan's second-largest bank said
it had provided authorities false information about how it
handled the loan problem.
The FSA issued a business improvement order on Mizuho in
late September for failing to take action for two years after
the bank learned some of its loans were made to "anti-social
The 230 small transactions totalling about $2 million,
mostly made up of car loans, were made by Mizuho
consumer-finance affiliate Orient Corp and were among
bulk loans the bank later bought from Orient.
The bank initially told regulators that the problem loans
had been reported to only as high as the compliance executive
level, but later said top executives were also aware of the
matter, prompting the FSA to conduct another investigation and
consider an additional penalty.
A Mizuho spokeswoman declined to comment. FSA officials were
not immediately available for comment.
(Reporting by Taro Fuse and Taiga Uranaka; Editing by Robert