Japanese gangsters are poised for a credit crunch after the country's top banking lobby declared it was fed up with yakuza members defaulting on car and small-business loans and would work with police to cut them off.
The move comes amid a scandal engulfing Mizuho, Japan's second-biggest financial group by assets, which said last month that it had supplied gang members with loans via Orient Corp, a consumer-finance affiliate.
Takeshi Kunibe, chairman of the Japanese Bankers Association, on Thursday told reporters that the group would team up with the National Police Agency to share information on crime syndicates, so that gangsters seeking funds from about 200 domestic and foreign banks are cut off at the source.
After the scandal emerged, Japan's market watchdog, the Financial Services Agency, ordered Mizuho to improve its control and compliance functions, declaring them "seriously" flawed. The lending to "antisocial forces" went on for more than two years after it was first detected, the FSA said. Mizuho said that transactions totaled 200 million yen ($2 million), mostly for car loans.