Industrial Bank of Japan

Industrial Bank of Japan
Company type	Private bank
Industry	Financial services
Founded	1902
Successor	Merged into Mizuho Financial Group (2001)
Headquarters	1-3-3 Marunouchi
Key people	Masao Nishimura
Products	Financial Services
Website	Official website

TheIndustrial Bank of Japan, Limited(IBJ), based inTokyo,Japan,was one of the largestbanksin the world during the latter half of the 20th century.

It combined withDai-Ichi Kangyo BankandFuji Bankin 2002 to formMizuho Financial Group.^[1]^[2]

History

IBJ was founded as a public-sector bank under theIndustrial Bank of Japan Actof 1902. At that time, Japan was in the throes of itsIndustrial Revolution,and there was a strong demand for long-terminvestmentcapital. IBJ raised funds by issuing bank debentures.

IBJ also acted as the trustee in corporatedebentureissues - notably, the major Japanese railway company issue of 1906 inLondon,amount to the then-enormous sum of 1 million pounds sterling. These activities contributed to the building of the Japanese domesticsecurities market,and to the generating of a higher profile for Japanese borrowers in the international market.

This early experience of a sophisticated mix of corporate andinvestment bankingwith exposure to trust work is unique to IBJ amongst Japanese banks. In the original Act, there was the wording, “Trust business related tolocal government bond,corporate bonds, andequities”.This was the first time for the term “trust”, or “shintaku”(Tín thác),to appear in the Japanese statute book.

The 1918 amendment to the IBJ Act permitted theunderwritingand offering of equities. At that point, IBJ had the full capabilities for what is now termed investment banking. However, that was at what proved to be the peak of the demand created for Japanese products by theFirst World Warand the consequent economic boom.

Thereafter, the next 30 years of Japanese history encompassed many adversities for society in general and for financial institutions in particular: theGreat Kantō earthquake,theShowa Financial Panic,and finally, theSecond World Warand the postwar recovery.

IBJ became a private-sector bank in 1950 and took on legal form under theLong-Term Bank Actof 1952. However, the Act was framed within the terms of the US-led Occupation policy of compartmentalizing financial services. IBJ was forced to retreat from much of its former investment banking activities and return principally to long-term lending funding by issuing bank debentures.

During the high-growth period of the Japanese economy in the 1960s, IBJ was particularly active in financingsteelproduction,shipping,shipbuilding,andautomobilemanufacturing. Following thefirst oil crisis,Japan moved to a pattern of lower growth as a mature economy, and IBJ expanded its customer base at home, and started the process of expansion overseas.

In Japan, the wholesaling of bank debentures to major financial institutions and the regional banks led to a network of strong relationships. This was all supported by the fact that, originally a public-sector bank, IBJ had nokeiretsuaffiliations: IBJ has always been independent of the large corporate groupings characteristic of Japan and was hence number 2 banker to each and all of the major keiretsu groupings. Internationally, IBJ was free to pursue its investment banking ambitions.

References

^Benton E. Gup (2004).Too Big to Fail: Policies and Practices in Government Bailouts.Greenwood Publishing Group.p. 261.ISBN 978-1-56720-621-0.
^William D. Hoover (18 March 2011).Historical Dictionary of Postwar Japan.Scarecrow Press.p. 33.ISBN 978-0-8108-7539-5.

[1] Benton E. Gup (2004).Too Big to Fail: Policies and Practices in Government Bailouts.Greenwood Publishing Group.p. 261.ISBN 978-1-56720-621-0.

[2] William D. Hoover (18 March 2011).Historical Dictionary of Postwar Japan.Scarecrow Press.p. 33.ISBN 978-0-8108-7539-5.

[1]

[2]

Authority control databases
International	ISNI VIAF
National	Germany United States Japan

History

See also

References