Mizuho must regain trust through rapid reform efforts
Mizuho Financial Group Inc., one of the country's three major banking groups, is being put to the test over whether it can evolve into a financial group with a sense of unity by carrying out necessary reforms.
On Monday, the company announced a plan to integrate the operations of Mizuho Bank, Mizuho Corporate Bank and other banking units under its wing in a few years.
The integration is aimed at regaining public confidence in the group by bolstering its management following a massive computer system failure that occurred days after the March 11 disaster.
The immediate goals of the reform will be to unify the computer system for settlement of transactions and integrate the personnel management and administration systems of group companies.
Mizuho Financial Group President Takashi Tsukamoto said at a news conference Monday that Mizuho Bank President Satoru Nishibori will step down to take responsibility over the computer system failure. He also presented measures to avert a recurrence of such a problem.
However, concrete timetables and integration procedures remain vague and lack a sense of urgency. Reform measures need to be carried out much more rapidly.
===
Lack of unity
Mizuho Holdings Inc., the predecessor of Mizuho Financial Group, was inaugurated in 2000 with three major banks--Dai-Ichi Kangyo Bank, Fuji Bank and the Industrial Bank of Japan--forming its core. The three banks merged in 2002 into two banks--Mizuho Bank and Mizuho Corporate Bank--operating under the holding company.
The top posts of the holding company and the two core banks were shared by those heading the former three banks. This led to a lack of corporate unity as each fought to protect his own turf.
The Mizuho group suffered a large-scale computer system failure in 2002. The group came up with corrective measures that included strengthening the computer system and eliminating personnel allocations designed to maintain a balance among the former three banks. However, these measures were not implemented and the computer system crashed again.
Mizuho admitted it lacked experienced personnel capable of understanding and supervising the system and that insufficient cooperation within the group exacerbated the damage caused when the system crashed. We can say unresolved internal divisions were the main cause.
Even now, the two core banks' fundamental computer systems, which were inherited from the former banks, operate separately. This causes great concern about the systems' capabilities as it is impossible for a backup system to function in times of trouble.
===
New computer system
We feel uneasy when the computer system of a major financial group serving as the social infrastructure for settling financial transactions is so unreliable.
The Mizuho group plans to develop a new system to be shared by the group's companies. The group must do everything it can to prevent a recurrence of a system failure by improving processing capacity. To secure sufficient investment funds, further restructuring efforts are necessary.
The group's total assets amount to 160 trillion yen, the second largest after that of Mitsubishi UFJ Financial Group. But in terms of profits, Mizuho ranks last among the three top financial groups, trailing MUFG and Sumitomo Mitsui Financial Group.
Under international rules, major banks will be required to increase their core capital, including internal reserves, from 2013. Strengthening their earning capacity, therefore, is a pressing task.
Banks must urgently deal with changes in their management environments.
Erase residents' anxiety with detailed health survey
When an accident occurs at a nuclear power plant, many people worry about the health effects of being exposed to radiation.
The accident at the Fukushima No. 1 nuclear plant has released a large amount of radioactive materials into areas around the plant. The amount spewed into the environment so far is about one-tenth that released in the 1986 accident at the Chernobyl nuclear power plant in Ukraine, then a part of the Soviet Union.
The Fukushima prefectural government has announced it will establish a panel this week to investigate the health impact of the nuclear accident on residents living in the plant's vicinity. About 150,000 people will be subject to a survey expected to continue for more than 30 years.
Residents near the plant are growing worried about future health effects caused by the radiation. We hope the panel's investigation will swiftly take shape.
This is a large task that can hardly be fulfilled by an individual local government alone. The central government needs to extend its full support to this project.
===
Start project soon
Health impacts caused by radiation exposure do not always become apparent in a matter of one or two years. Basically, such a survey should be carried out over 10 or 20 years.
Collecting detailed data of people's radiation exposure--for instance where they were exposed and how much they were exposed to--together with data showing changes in their health condition, will be painstaking work.
To estimate the dose of radiation residents received, it is necessary to grasp accurately the extent of radioactive contamination at their respective locations.
Estimated radiation exposure will be calculated by factoring in the extent of contamination in these areas, and asking residents how long they were in the contaminated location and their movements.
However, it will become difficult to get an accurate handle on the radiation exposure if time passes and residents become unable to remember these details. The survey should be started as soon as possible.
It also is important to respond attentively to residents' questions about their health, as it could be difficult to convince them to take part in the survey just for the sake of it.
===
Careful analysis needed
After World War II, the United States led a wide-ranging survey on residents who had been in Hiroshima and Nagasaki when the U.S. military dropped atomic bombs on the cities. The survey results were made public later and have served as basic data for assessing the impact of radiation on the human body.
This data detailed the health impact of a massive amount of radiation exposure suffered at the instant the atomic bombs detonated. However, the Fukushima survey will study the long-term impact of exposure to low-level radiation. Analysis of the new figures should carefully take this difference into account.
No proper surveys were conducted soon after the Chernobyl accident, partly due to the Soviet Union's suppression of information and its dissolution a few years later. As a result, although an international organization has said the accident had little effect on human health, except for higher rates of thyroid cancer, civic groups have claimed that more than 100,000 people died from radiation exposure. This has created confusion and anxiety that lingers to this day.
The mistakes of the Chernobyl disaster must not be repeated.
0 comments:
Post a Comment