Appendix Table 4.1. | Major Financial Failures and Improvement of Safety Nets
Year
Major cases of financial failures (2), (3) No. of (month, year) and resolution cost (amount failures ( 1 ) of financial grant (4): unit of 0. 1 billion yen)
71—'90
0
91 92 93 94
1 1 2 4
95
6
96 97
5 17
98
28
99
45
'9 1 -'90
1 09
Improvement of safety nets (month, year) • Foundation of deposit insurance system (Apr 7 1 ) —deposit insurance with upper limit; pay-off scheme • Introduction of financial assistance scheme (Jul 86)
Toho Sogo Bank (Jul 9 1 ) loan of 80 Toyo Credit Cooperative (Apr 92) 200 Tokyo Kyowa Credit Cooperative (Dec 94) Anzen Credit Cooperative (Dec 94) 400: total of two credit cooperatives Cosmo Credit Cooperative (Jul 95) 1 ,250 Hyogo Bank (Aug 95) 4,730 Kizu Credit Cooperative (Aug 95) 1 0,048 Taiheiyo Bank (Mar 96) 1 , 1 70 Hanwa Bank (Nov 96) 803 Kyoto Kyoei Bank (Oct 97) 438 Sanyo Securities applied for the Stock Company Reorganization and Rehabilitation Act (Nov 97) Hokkaido Takushoku Bank (Nov 97) 17,732 Yamauchi Securities announced discontinuation of business (Nov 97) Tokuyo City Bank (Nov 97) 1 , 1 94 Midori Bank (May 98) 7,700 Fukutoku Bank/Naniwa Bank* (May 98) Long-term Credit Bank of Japan **(Oct 98) 32,39 1 Nippon Credit Bank **(Dec 98) 32,440 Kokumin Bank (Apr 99) *** 1 ,769 Kofuku Bank (May 99) ***4,259 Tokyo Sowa Bank (Jun 99) ***4,3 1 2 Namihaya Bank (Aug 99) ***3,740 Niigata Chuo Bank (Oct 99) *** 1 ,687
• Establishment ofTokyo Kyodo Bank (Jan 95) • Establishment of Resolution and Collection Bank • Establishment of special financial assistance scheme (full protection of deposits) • Raising of insurance premium and introduction of special insurance premium (|ul 96) • Diversification of resolution schemes such as new establishment/merger, etc. (Dec 97) • Introduction of public fund for full protection of deposits • Expansion of the facilities of Resolution and Collection Bank • Foundation of capital infusion system for financial institutions (Feb 98) • Introduction of special public management system • Introduction of financial reorganization administrator/bridge bank system • Capital reinforcement system for financial institutions (Oct 98)
Source: Deposit Insurance Corporation (July 2000). Annual Report of Deposit Insurance Corporation for 1999. *: a special merger which means buying-up alone and not a financial grant **: a special public management. ***: management by a financial reorganization administrator 1. The number of failures was counted as the number of failure resolution cases accompanied by exercise of deposit insurance based on the announcement date of failure. All failures of banks and major failures of credit cooperatives/unions are included in the chart as individual cases. 2. The failure resolution schemes employed were generally the Financial Assistance Scheme under the premise of transfer of operation/business (partly relieving merger) but since 1998 new resolution schemes were often used. 3. In the resolution of Long-term Credit Bank of Japan, besides the above-mentioned financial grant of 3,239 billion yen, the additional amount of 348.9 billion was supplemented from the financial reconstruction account. In the cases of Nippon Credit Bank and five banks which failed in 1998, their financial resolution was not completed and the amount of financial grant was not ascertained when this paper was written, so the amount of liabilities exceeding the assets is shown at the end of March 2000. 4. The amount of financial grant may change due to reduction at a later date.
Copyright © by the Inter-American Development Bank. All rights reserved. For more information visit our website: www.iadb.org/pub
96 TAKAFUMI SATO