The scandal surrounding a Bank of Japan-led $1.98 billion bailout of two busted credit cooperatives has claimed its first victim: Tetsuya Horie, president of Long-Term Credit Bank of Japan, a leading commercial bank. Horie resigned on Mar. 31 to take responsibility for LTCB's tangled financial ties to Tokyo Kyowa Credit Assn. and Anzen Credit Assn. The two co-ops got in trouble after lending big to political figures.
The bailout has caused an uproar because taxpayers are being asked to rescue politically connected depositors. LTCB, which lent billions to Tokyo Kyowa's real estate affiliate, will likely be forced to fork over most of the $568 million that private banks are chipping into the bailout fund.