Heinz, thanks for that, here is the WSJ asia addition cov. of CSFB sanctions
July 30, 1999
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Credit Suisse Is Sanctioned
By Japanese Regulators
By JATHON SAPSFORD
Staff Reporter of THE WALL STREET JOURNAL
TOKYO -- Japanese regulators formally sanctioned the Tokyo operations of Credit Suisse Group in a widely expected move designed to show foreign financial companies in Tokyo that they face stricter scrutiny under Japan's new regulatory regime.
Thursday, Japan's top financial-industry regulator, the Financial Reconstruction Commission, revoked the banking license of the Swiss bank's Credit Suisse Financial Products unit. The commission also suspended a few limited operations at units Credit Suisse Trust & Banking Co. and Credit Suisse Asset Management Ltd.
Japan Could Revoke Credit Suisse License (July 14)
Japanese Agency Considers Penalties for Credit Suisse's Tokyo Operations (May 26)
Regulators said the measures, including Japan's first banking-license revocation in half a century, were meant to sanction Credit Suisse for obstructing bank examiners when they launched a surprise but routine inspection of the bank's Tokyo operations in January. Credit Suisse also is charged with conducting "inappropriate" activities, which commission officials said included the widespread marketing of financial products that banks and insurers used to conceal problem assets.
Credit Suisse doesn't dispute the charge of obstructing examiners. It even hired a law firm to conduct an independent investigation that found a handful of employees sought to shred and conceal documents as examiners were launching their inspection. Those employees have since been dismissed, Credit Suisse said.
But officials at the Swiss bank insist the financial products they offered to banks were compliant with Japanese law. Moreover, other foreign financial companies in Tokyo concede that they offered similar products in the past, with the full knowledge of regulators at the Finance Ministry, which monitored markets until June 1998 when a scandal prompted lawmakers to shift financial-market regulation to the FRC and its affiliated body, the Financial Supervisory Agency. In sanctioning Credit Suisse, the FRC was approving recommendations made this month by the agency.
Some foreign bankers in Tokyo said the sanctions illustrate the power of Japan's bureaucrats to interpret goals as they see fit.
It isn't clear how much the sanctions will hurt Credit Suisse's business in Tokyo. "We don't take the sanctions lightly," said spokesman Tom Grimmer. But rival companies said damage to the bank's reputation could hurt business.
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