Japan's financial watchdog said Wednesday it requested Mizuho Financial Group Inc. and its banking arm Mizuho Bank to submit a work plan for system maintenance after a series of system failures this year, in a rare move to effectively oversee the system of a major bank.
The Financial Services Agency made the request as part of its business improvement order issued amid lingering concerns over the security of the financial group's system after it experienced seven failures this year.
Mizuho, one of the three Japanese megabanks, is still working to identify the root causes of the series of failures including the latest system problem that disrupted about 100 automated teller machines on Sept. 8.
"We take a serious view of the order," Mizuho Financial Group and Mizuho Bank said in a joint release. "Giving top priority to stable system operations, we will continue to take all possible measures to secure safe and steady system upgrades."
The latest order comes after Mizuho reported details of the first five failures and measures to prevent recurrences to the FSA on two occasions earlier this year as requested.
Of the five cases, the first four occurred within two weeks from Feb. 28, when over 4,300, or about 80 percent of Mizuho's ATMs operating nationwide, were temporarily suspended and more than 5,000 bank cards and books were stuck inside them.
A panel of lawyers and computer system experts set up by the bank concluded in June that the four system problems were caused by poor operation and management, rather than system defects.
Mizuho Financial Group President and Group CEO Tatsufumi Sakai and 10 other executives took pay cuts of 10 to 50 percent for four months to take responsibility for the repeated failures.
Sakai has denied the possibility that the executives would resign, saying the group would focus on measures to prevent recurrences. The bank also recruited an executive from IBM Japan Ltd. to oversee systems management.