Mizuho Bank and Mizuho Financial Group, its holding company, received a business improvement order from the Financial Services Agency on November 26 for the eight IT issues that plagued the bank this year.
The FSA underlined in its order that “Mizuho has damaged the confidence of the Japanese payment system and that its management bears a heavy responsibility”.
After Mizuho began to fully exploit his base Minori system, in which he invested 400 billion yen ($ 3.5 billion), an executive with little experience was appointed head of the systems department and staff. of the department was reduced by 60%.
The FSA believes that management has neglected its responsibility to prepare to avoid system problems and has asked the bank to take drastic countermeasures.
The ordinance, the second issued for the mega-bank this year, is based on the banking law.
In addition to this, the finance ministry also on the same day ordered corrective actions for the bank’s inappropriate response to foreign remittances made about two months ago when the bank was suffering from computer problems.
The ministry issued the ordinance on the basis of the Foreign Exchange and Foreign Trade Control Law, the first time it has issued one since the revised law came into force in 1998.
The mega-bank should be faced with serious questions about the governance of its IT systems.
On September 30, Mizuho experienced equipment problems when he sought to verify whether the recipients of the foreign remittances in question were on sanctions blacklists that include terrorists, sources said.
After the problems arose, Mizuho skipped some of the prequalification procedures required by the same law in order to be able to transfer funds as soon as possible.
The bank verified the information after the money was transferred, but the law does not allow it. The finance ministry was investigating the case on suspicion that the bank may have broken the law.
Mizuho Bank’s compliance department was unaware that such an action could violate the law, sources said.
Remittances to those on the sanctions lists have not been confirmed.
But the finance ministry reportedly ruled that Mizuho’s inappropriate surveillance action is a major problem given that it is a mega-bank playing a key role in the financial system.