Japanese banks checked for stability against system malfunctions

The Bank of Japan will inspect whether commercial banks have sufficient risk-management systems and respond appropriately amid computer-system malfunctions.

The move to include thorough checks in these areas comes in light of the system-wide computer breakdown at Mizuho Bank in March and the major bank's inability to resolve the problem quickly, according to the central bank.

The examiners will check if banks have the ability to analyze relevant information in the event of a system malfunction, what training they have provided to employees to prepare for such an eventuality and whether managers have appropriate levels of understanding of the risks associated with such malfunctions, it said.

The inspectors will also check whether banks have the ability to maintain their operations even in a contingency such as the catastrophic March 11 earthquake and tsunami disaster, it added.

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