Posted on: Saturday, December 29, 2001

Ishikawa Bank declared insolvent

Associated Press

In a sign of broadening instability in the Japanese financial system, a second-tier regional bank declared itself insolvent yesterday, becoming the first such lender to go under in more than two years.

The Ishikawa Bank in central Japan has applied with the Financial Services Agency to begin bankruptcy proceedings, said Hakuo Yanagisawa, state minister in charge of financial policy. The agency immediately appointed administrators to help the bank restructure.

Ishikawa Bank, which has 65 branch offices and 709 employees, posted a loss of $183 million for the fiscal year ended in March.

Cleaning up the bad loans at Japanese banks is one of the key promises for economic reform made by Prime Minister Junichiro Koizumi.