Japan Press Weekly

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2015 May 27 - June 2 [SOCIAL ISSUES]

Tokyo gov’t to withdraw from bank business after squandering Tokyoites’ money

The Tokyo Metropolitan Government will reportedly end its ties with ShinGinko Tokyo Bank dubbed the “Ishihara Bank” after wasting 140 billion yen in Tokyoites’ money.

ShinGinko Tokyo was created with great fanfare in April 2004 on the initiative of the then Tokyo Governor Ishihara Shintaro. His government invested 100 billion yen in tax money in the bank. In the previous month at a Metropolitan Assembly meeting, Ishihara claimed that the money invested in the bank will yield high rates of return.

However, the Tokyo-funded bank was on the verge of collapse only four years after its establishment due to the Ishihara administration’s reckless business policies and ballooning bad loans induced by easy acceptance of loan applications. Of the 100 billion yen in funds from the Tokyo government, 85.5 billion yen was sunk into accumulated deficits. Nevertheless, the metropolitan government used another 40 billion yen to prop up the failing bank.

ShinGinko Tokyo is now negotiating with Tokyo TY Financial Group, Inc. for a merger, aiming to reach agreement by this autumn.

In addition to former Governor Ishihara Shintaro who pushed ahead with a plan to create and finance the bank, the Liberal Democratic, Komei, and Democratic parties which strongly supported his plan in the Tokyo Metropolitan Assembly should be blamed for the wasteful use of taxpayer money.

Opposing the creation of ShinGinko Tokyo Bank, the Japanese Communist Party has demanded that the Tokyo government stay away from the bank business altogether.


Past related articles:
> Capital of ShinGinko Tokyo bank to be reduced [July 1, 2008]
> Tokyo to spend 40 billion yen for failing bank it founded [March 27, 29, 2008]
> Governor Ishihara should be held responsible for failure of ShinGinko Tokyo: JCP [March 12, 2008]