Asia Risk 15: Kenji Fujii, Mizuho Securities

Japanese financial institutions have faced severe tests during the past 15 years including rogue trading scandals, huge non-performing loans and a need to adopt aggressive regulatory rules. Kenji Fujii maps out these challenges and indicates how they helped to shape modern financial risk management practices in Japan

For any Japanese banker, 1995 was a memorable year in terms of risk management. In February, Baring Brothers, an underwriter of the first Japanese government debt way back in 1902, collapsed due to the actions of a single ‘rogue trader’ in Singapore Nikkei Index Futures. Then in September, Daiwa Bank, a major Japanese city bank, published its loss of $1.1 billion from US Treasury bond operation at its New York branch. It was also the victim of a ‘rogue trader’, Toshihide Iguchi, who had