Bank of Japan to tighten rules on executives’ finances

TOKYO, July 7, 2006 (AFP) – The Bank of Japan said Friday it will ban its executives from investing in most types of financial products following a scandal over its governor’s personal investments. They will be forbidden from trading stocks or investing in private funds, the central bank decided, based on recommendations from an advisory panel.

The panel also suggested top central bankers’s assets are handled by third parties, such as a trust.

The new rules also require the governor, deputy governors, six other policy board members and six executive directors to disclose their assets.

BoJ executive director Hajime Mizuno said: “We want to make all the changes effective by the end of this month, at the latest.”

The changes come after BoJ governor Toshihiko Fukui admitted to profiting while in office from an investment in a scandal-tainted fund operated by Yoshiaki Murakami, who has been indicted for alleged insider trading.

Fukui has not broken any laws nor the central bank’s own internal rules, but he has taken flack for the timing of his decision in February to pull out his investment — just ahead of the end to the BoJ’s ultra-loose monetary policy.

The governor has repea