Glitches mar Japan bank's startup
By Joji Sakurai
Associated Press
TOKYO — It's been April Fools' week for the world's biggest bank, Mizuho Financial Holdings, which opened shop just five days ago after the merger of three Japanese financial giants.
On Monday, even as launch celebrations got under way, Mizuho ATMs across Japan went offline, leaving customers without cash. Then, a computer glitch blocked millions of money transfers, preventing account holders from paying their bills.
The worst came yesterday, when about 30,000 people found they had been billed twice for the same credit card purchases, and about a hundred more complained they had been debited for withdrawals they hadn't made.
For everyone from ordinary folks to the highest echelons of power, the failures were an almost comical reminder of just how bad things have gotten for a banking industry that was once the envy of the world.
"How can such an idiotic thing happen in a civilized society?" groused Finance Minister Masajuro Shiokawa. "It's a sign of the shakiness of the financial industry."
The creation of Mizuho, which combines Fuji Bank, Dai-Ichi Kangyo and the Industrial Bank of Japan, was intended to show that Japanese banks — staggering under hundreds of billions of dollars of bad debt — were learning how to become more efficient through consolidation in a more harsh global business environment.
But instead of demonstrating renewed competitive tooth, Mizuho showed that more than two years of fine-tuning the merger weren't enough to ensure that the new financial behemoth could provide basic services.
"It's such a simple mistake," said Hideo Kusunoki, a 53-year-old taxi driver waiting for customers near Tokyo's Ginza shopping district. "The higher-ups at the bank say the computer networks weren't compatible, but shouldn't they have known this before?"
Officers at Mizuho, whose 151 trillion yen ($1.2 trillion) in assets make it the biggest bank in the world, bowed deeply in apology at a news conference yesterday and admitted they hadn't succeeded in integrating the three companies' computer systems.
"We cannot help but admit that we were lacking in preparation," said Fumito Ishizaka, Mizuho's chief information officer. "We take the problems seriously. I think they have substantially damaged our reputation."
Ishizaka said the glitches were partially caused by an overwhelming flow of data at the start of Japan's fiscal year.
None of the problems at Mizuho that emerged this week will have lasting consequences, and most are likely to be solved within days. But they were certainly bad news for an industry that is struggling to shore up its credibility.
Japanese banks estimate that they are saddled with about 36 trillion yen ($270 billion) in dubious loans that have only grown over the nation's 10-year economic slowdown.
Japan's government ended its blanket guarantee on savings deposits at banks on Monday, a move likely to accelerate the concentration of money in a couple of major banks considered the least likely to fail.
