The Governor of the Bank of Japan, Yasuo Matsushita, has indicated he will resign to take responsibility for a bribery scandal, which led to the arrest of one of his senior officials.

The current scandal centres around allegations that one, and possibly more, Bank of Japan employees accepted lavish entertainment from commercial banks in return for confidential information.

Governor of the Bank of Japan, Yasuo Matsushita: accepts responsibility

It is the first time that a Governor of the Bank of Japan has offered to resign in connection with a scandal since the Second World War, but there have also never before been such widespread allegations of corruption.

On Wednesday the bank was raided and the chief of its Capital Markets Division, Yasuyuki Yoshizawa, arrested. He is suspected of accepting more than 4 million yen ($31,500) from the Industrial Bank of Japan and Sanwa Bank in return for information.

The raid followed the arrests of a number of other government officials, including two Finance Ministry bureaucrats. Several other big-name banks are suspected of involvement in the scandal, and the amount Mr Yoshizawa allegedly accepted in kickbacks might exceed 10 million yen (£78,700), a Japanese news agency said.

Mr Matsushita offered his resignation to the Prime Minister by telephone, but is expected to stay at his job until the end of the month. He has been Governor of the bank for four years. He is a former vice minister at the Ministry of Finance and was chairman of a leading commercial bank. As such he typifies the close relationship between officials in charge of Japan's financial system and the businesses they oversee.

Mr Matsushita's resignation, while deemed by many as the correct response to the scandal, raises questions about who will take over as Governor. The investigation has come as another blow to Japan's financial system and the choice of Mr Matsushita's replacement will be crucial to restoring confidence both in the bank and Japan as a whole. In normal circumstances the Deputy Governor would automatically get the job but the government is thought to be considering appointing an outsider.
 

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