A scandal over accusations of collusive ties between regulators and financial firms threatened on Monday to entangle Japan's central bank, which said it would look into possible questionable conduct by its officials.
The latest twist in a saga that forced the finance minister to resign late last month met a muted response from many pundits. But some warned that the scandal, which has called into question yet again the role of regulators in Japan's financial woes, risked spiraling out of control."We've had an awful lot of time to get used to this . . . and I don't think the idea of corruption in Japan is all that surprising," said David Threadgold, research director at ING Barings. "But if they pursue this without any idea of where to stop it, it gets terribly dangerous because you discover it's endemic. . . . What they have to do is draw a line under it and say this is enough, or there will be no one left."
Faced with a weekend newspaper report that senior Bank of Japan officials have been wined and dined to the tune of millions of yen (tens of thousands of dollars) by banks over the past five years, a BOJ executive told a news conference that the central bank would question about 600 management-level employees to see if they had done anything illegal or inappropriate.
Takayuki Kamoshida, a BOJ executive director, said employees would be questioned immediately and the results announced as soon as possible. He said staff would be giving information voluntarily so there was a limit to what the BOJ could find out, but added the central bank would do its best.
The mass circulation daily Yomiuri Shimbun said on Saturday that two central bankers alone had accepted bribes of more than four million yen ($32,000) in the form of lavish entertainment at restaurants and golf courses. The majority of the BOJ officials involved were in charge of allocating funds to banks for their daily operations, the paper added.
Yomiuri also said a recent internal audit by a number of major city banks revealed that at least five big banks had entertained BOJ officials. It did not name the banks.
The Japanese public has been presented with a steady diet of scandals involving bureaucrats and bankers in recent weeks.
Two Finance Ministry inspectors have been arrested on suspicion of taking bribes from banks following a high-profile prosecutors' raid on the elite ministry.