List of Operations of Principal Transaction Banks
|1 Provision of management guidance to business groups and individual corporations (Regulation on Credit Operations of Banking Institutions, Article 8; Operational Bylaw on Credit Control over Business Groups, Article 6)|
|• Encourage an adequate level of equity capital.|
|• Restrict investment in new business and encourage disposal of corporations in 'non-major' (that is, non-core) industries.|
|• Restrict real estate acquisition and encourage disposal of non-operating real estate.|
|• Curb excessive use of foreign loans.|
|• Consult on an annual plan for financing and its uses.|
|• Induce sound management.|
|• Encourage self-financing of investment in new business and real estate acquisition.|
|• Provide other management guidance for the improvement of capital structure.|
|2 Approval for corporate activities (Operational Bylaw on Credit Control over Business Groups)|
|• Give prior approval for investment in new business by member corporations of business groups (Article 11).|
|• Give prior approval for a real estate acquisition by large corporations (Article 13).|
|• Give prior approval for changes in the use of real estate owned by client corporations.|
|3 Acceptance of Report (Operational Bylaw on Credit Control over Business Groups, Article 20)|
|• Receive report about investment in new business by a group owner or by persons with special relations with the owner.|
|4 Report to the Office of Bank Supervision and Examination (OBSE)|
|• Annual report on the general situation of business groups at year-end, due by March of next year (Operational Procedure, Article 2.1).|
|• Monthly report on investment in new business by business groups that do not need approval of their principal transaction bank for such activity (Operational Procedure, Article 2.2).|
|• Consolidated financial statements of business groups, as reported by their principal corporations (Operational Bylaw, Article 6).|
|• Report on guided equity ratio and actual equity ratios of business groups and their member corporations (Operational Bylaw, Article 7).|
|• Report concerning the approval of Major Corporation's acquisition of other firms (Operational Bylaw, Article 8.3).|
|• Quarterly report on the result of ex post supervision of the use of funds provided to Major Corporations (Operational Bylaw, Article 9.2).|
|• Report on abuses of banks loans by Major Corporations reported by other banking institutions (Operational Bylaw, Article 9.4).|
Questia, a part of Gale, Cengage Learning. www.questia.com
Book title: The Japanese Main Bank System: Its Relevance for Developing and Transforming Economies.
Contributors: Masahiko Aoki - Editor, Hugh Patrick - Editor.
Publisher: Oxford University Press.
Place of publication: Oxford.
Publication year: 1994.
Page number: 491.
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