The House of Representatives Committee on Financial Affairs will summon two bank presidents to give unsworn testimony on reports that a top Financial Services Agency official pressured the banks to favor specific borrowers, officials said Tuesday.
The committee today will question Shinsei Bank President Masamoto Yashiro and Aozora Bank President Hiroshi Maruyama in connection with a media report that FSA Commissioner Shoji Mori, at the request of lawmakers, pressured Yashiro to continue lending to risky borrowers.
The request to hold the interview session was made by the Democratic Party of Japan, the largest opposition party.
According to a Sept. 26 report in the Asian Wall Street Journal, Mori allegedly accused Shinsei Bank officials of being too strict in terms of credit policy.
"Shinsei Bank should behave in line with other Japanese banks," Mori was quoted as saying Aug. 10 during a meeting with Yashiro in which the FSA chief allegedly identified four companies Shinsei deemed credit risks.
Mori, speaking at a press conference Monday, said, "There is no such fact."
Shinsei Bank, born out of the ashes of the failed Long-Term Credit Bank of Japan, made a fresh start last year after the government injected massive public funds into LTCB and sold it to a consortium led by U.S. investment firm Ripplewood Holdings LLC.
In October, the FSA ordered the bank to boost lending to small and midsize companies after it failed to hit targets in a business plan.
Aozora is the reincarnation of the failed Nippon Credit Bank, a governmental bank similar to LTCB, that is now operated by a trilateral consortium led by Softbank Corp.