Japan’s government is investigating the cause of the huge losses at Norinchukin Bank and how to avoid such predicaments in the future.
The bank, which serves agricultural, forestry and fisheries cooperatives across Japan, racked up the losses due to soured investments in foreign government bonds.
An expert panel set up by the Agriculture, Forestry and Fisheries Ministry held its first closed-door meeting on the issue on Friday.
The bank says a rise in overseas interest rates helped drive up latent losses on the bonds to more than 2.3 trillion yen, or more than 15.8 billion dollars, as of the end of June.
Norinchukin expects to report a net loss of 1.5 trillion yen, or about 10 billion dollars, for the year ending next March.
The ministry says the panel discussed strategies to respond to interest rate hikes by overseas central banks. It also looked at governance of the bank’s market operations.
The panel is expected to compile a report with recommendations between the year-end and early next year.