Tape Causes Japanese Bank Reformer to Quit

The head of a key Japanese bank reform agency was forced from office after opposition politicians released a tape recording of him offering to shield weak financial institutions from scrutiny by government auditors. The abrupt departure of Michio Ochi was precipitated by a speech last week in which he promised to give his “utmost consideration” to lenders who complain that auditors are being too tough. Ochi had been named chief of Japan’s Financial Reconstruction Commission last fall. His resignation underscores the degree to which coddling banks has emerged as a potent touchstone for voter resentment in Japan. The furor over Ochi’s comments also put the government of Prime Minister Keizo Obuchi on the defensive at the same time anti-bank sentiment has bolstered the fortunes of Tokyo’s maverick governor, Shintaro Ishihara. Earlier this month, Ishihara won praise from metropolitan voters by calling for a new tax on banks with operations in the capital city.