Japanese regulator to oversee Mizuho’s IT system – source

Band Yuki Nitta

TOKYO, September 22 (Reuters)Japanese banking regulator to oversee system management at Mizuho Financial Group 8411.T in an administrative action against the banking group following a series of technical failures, a source told Reuters on Wednesday.

The Financial Services Agency will take the rare action against retail lender Mizuho Bank and its parent company, Japan’s third-largest lender in terms of assets, later this month, according to the source familiar with the matter. The source declined to be named because the case was not yet official.

The Nikkei newspaper, which first reported the FSA’s decision, said the regulator would jointly manage the system with the bank and order system updates and maintenance to be carried out under its control.

The system’s management structure can also be revised if necessary, the Nikkei said.

The regulator will determine where the management responsibility lies after clarifying the cause of Mizuho’s recent technical issues, it noted.

A spokesperson for Mizuho declined to comment.

Mizuho has been hit by a series of high-profile technical failures this year, although he spent more than $ 3.6 billion to overhaul his systems in 2019. The redesign follows two large-scale failures in 2002 and 2011 .

A third-party report commissioned by the bank found that its corporate culture is to blame for its long history of technology system failures, creating an atmosphere in which managers are reluctant to voice their opinions and unable to respond well to crises.

(Reporting by Yuki Nitta and David Dolan; Editing by David Evans and Jacqueline Wong)

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Gordon K. Morehouse