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Asahi Bank under scrutiny
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November 22, 1996: 10:44 a.m. ET
Japanese bank's New York operations face possible fine, written reprimand
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NEW YORK (CNNfn) - Asahi Bank says it does not expect the U.S. Federal Reserve will charge it with wrongdoing relating to an internal Fed report, even though bank officials admit to a violating the Fed's rules on confidential bank examination reports.
"I don't think the Fed will ever take legal action against us," Asahi Bank president Shigehiko Yoshino said Friday in an interview with Kyodo news service. "There exist no irregularities at the New York branch."
Asahi officials told Japan's Ministry of Finance earlier this week that executives at the New York branch opened a confidential Fed inspection report over the summer. Bank regulators frequently store such sealed documents at banks between examinations. Reading the documents is a violation of federal law.
Yoshino casually acknowledged the violation Thursday, saying "the act violates the Fed's internal rules, and I suppose we will face some form of penalty."
Yoshino staunchly denied allegations of financial mismanagement at Asahi's New York branch, however.
"There is absolutely no case where we incurred large losses," he said
Although a final decision has yet to be made, possible penalties include a fine and formal written reprimand. But it is unlikely the bank would be barred from doing business in the United States, according to a report in Friday's Wall Street Journal.
In addition, regulators are considering filing criminal complains against several officials involved in the case and have referred the situation to the U.S. Attorney's office in New York for review, the paper said.
The incident comes amid increased scrutiny of international banks following the conclusion of the Daiwa Bank Ltd. scandal earlier this year. Daiwa plead guilty to charges of concealing $1.1 billion in trading losses at its New York-based Daiwa Bank Trust over a 12-year period. In February, the bank agreed to pay a $340 million fines to the U.S. government after closing down the branch. 
From staff and wire reports
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