Japanese banks regulator widens probe of links to yakuza

Japan's financial regulator will widen an investigation next week into whether all three of the country's big banks, including top lender Mitsubishi UFJ Financial Group, conducted transactions with Japanese gangsters, known as yakuza.

Second-ranked Mizuho Financial Group has already come under regulatory scrutiny and has sanctioned 54 executives, including its president, following revelations that a consumer finance affiliate extended more than US$2 million in loans to people with close ties to organised crime.

Mitsubishi UFJ, Mizuho and Sumitomo Mitsui Financial Group were given notice yesterday of the inspections, the head of the Financial Services Agency's (FSA) investigation unit told a parliamentary committee.

FSA inspectors would arrive at the three banks to begin their investigations next Tuesday, the official said.

In addition to looking at whether the banks had dealings with people linked to organised crime, the inspection will also focus on compliance practices and risk management systems, FSA officials said.

In the case of Mizuho, an earlier FSA inspection found US$2 million worth of transactions, mostly in small car loans, that had been made with people tied to organised crime.