Statement by the Governor concerning the Kofuku Bank
May 22, 1999
Bank of Japan
1.We have today been informed by the Kofuku Bank that it has received an order from the Financial Reconstruction Commission to be placed under the management by the "Financial Reorganization Administrators"* pursuant to the "Law concerning Emergency Measures for the Reconstruction of the Function of the Financial System" and that the Deposit Insurance Corporation has been appointed as one of the Financial Reorganization Administrators. We have also been informed of this fact by the Financial Reconstruction Commission.
* Since the Kofuku Bank will continue its normal operations, the Financial Reorganization Administrators will manage not only the bank's property but also its business unlike a trustee in the corporate reorganization procedure. 2.The Kofuku Bank will carry out appropriate operations under the management by the Financial Reorganization Administrators and will seek to transfer its business promptly to receiving financial institution(s) with financial assistance from the Deposit Insurance Corporation.
3.The Bank of Japan has decided at today's Policy Board meeting, upon the request from the Finance Minister pursuant to Article 38 of the Bank of Japan Law, to provide necessary funds to the Kofuku Bank for the continuation of its business until the management by the Financial Reorganization Administrators is terminated.
4.Through these measures, the Kofuku Bank will continue normal operations, and all of the bank's obligations, including deposits and interbank borrowings, will be performed smoothly. The Bank of Japan considers that protection of depositors and others, and stability of the financial system will thus be ensured.