Mizuho Financial Group 6-K 2011
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of July 2011
Commission File Number 001-33098
Mizuho Financial Group, Inc.
(Translation of registrants name into English)
5-1, Marunouchi 2-chome
Chiyoda-ku, Tokyo 100-8333
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F x Form 40-F ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes ¨ No x
If Yes is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):82- .
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
June 29, 2011
To whom it may concern:
Regarding the Submission of the Business Improvement Plans
Mizuho Financial Group, Inc. (MHFG or we as the context may require) and Mizuho Bank, Ltd. (MHBK or we as the context may require) submitted today their Business Improvement Plans to the Financial Services Agency, in compliance with the Business Improvement Order dated May 31, 2011.
We would like to reiterate our deepest and sincerest apologies to all of our customers and to everyone who have experienced any inconvenience thorough the recent computer system failures which we have caused while Japan was experiencing difficult times after the Great Eastern Japan Earthquake.
MHFG and its group companies (Mizuho Group) will rigidly implement the Business Improvement Plans and counter-measures in surely preventing computer system failures from occurring again, and all officers and employees of Mizuho Group will go back to the basics of customer first policy in order to regain the confidence of all of our customers as well as society as a whole.
The following is an outline of the Business Improvement Plans.
(Note: Brackets [ ] indicate implementation deadlines)
<Improvements and counter-measures related to Measures to Prevent System Failures>
Regarding the bank accounts for which a large number of transactions is anticipated, a procedure for prior consultation with headquarters upon new account opening has been implemented.
<Improvements and counter-measures related to Inappropriate Responses and Actions After the Occurrence of Failures>
<Improvements of the response mechanism upon the occurrence of a crisis>
Given the inadequacy in swift announcement and reception of an initial crisis report and subsequent details, as well as the inefficient operation of the communication/co-ordination structure, we will revise communications and information-sharing flows among our headquarter business divisions for appropriate additional detail in the initial report to achieve adequate effectiveness and concreteness.
Reflecting on our experience of the recent crisis, we will implement training programs to familiarize management and employees with the revised internal crisis response systems and the information-sharing flows discussed in (i) and (ii) above and to instill behavioral patterns to be taken upon the occurrence of a crisis.
We will initiate bank-wide training programs regarding system failure, and with participation from management and the relevant divisions, will analyze the effectiveness of internal crisis response systems for communication and information-sharing flows immediately following the occurrence of a crisis, as described in (i) and (ii) above.
<Improvement of the system contingency plan>
We will assume a crisis scenario, which could have a material impact on our core business functions (including settlement-related businesses), that need to be in continued operation during a crisis, and will identify any risk of system phenomena that leads to such crisis.
We will identify the necessary requirements for the effective operation of the system contingency plan (including standards for activation, responsible personnel, recovery method, required time, impact on business, etc.), and will clarify the content.
We will develop and prepare a plan concerning the risk scenarios identified through the above measures. In terms of preparation, we will work jointly with Mizuho Information & Research Institute, Inc. (MHIR), a system development contractor, and Mizuho Operation Service, Ltd. (MHOS), an operation contractor, to ensure effectiveness of the plan.
In preparation for the development and implementation of a training plan, we reviewed our past training programs for each of the contingency plans related to our core banking system (STEPS).
Based on the training programs described in A. above and the risk scenarios identified through (i) above, we will develop a training program for system failures based on the following viewpoints:
Based on the training program for system failures, we will conduct simulation training aimed to increase effectiveness of the system contingency plan. We will also assess the effectiveness upon completion of the training program.
<Improvement of the business contingency plan>
In order to consolidate comments from the local offices, we will conduct a survey addressing the effectiveness of the business contingency plan for the recent system failures.
Given inadequacy of familiarization by each business divisions of importance of the check list items regarding timely and appropriate communication with customers during a crisis, as set forth in the check list used in creation and revision of the plan, we will emphasize such importance.
Upon prompt review by each business division based on the check list, we will revise the plan based on survey results from the local offices.
We will revise the plan based on individual cases seen from the recent system failures, including double wire transfers and special payments.
We will place in writing and enforce upon each business division procedures for activating the plan, currently shared within the administrative functions only. We will also enforce upon each business division the items that require special attention upon the activation of the business contingency plan.
We will notify local offices regarding transactions with a significant impact on our customers, such as settlement transactions, and will perform training and assess the effectiveness post-training by collecting feedback from the local offices.
We have implemented operational procedures to timely dispatch personnel, as well as measures to convene experienced personnel in a crisis situation, including pre-registration of experienced staff with development background in STEPS as well as experts. Given the recent system failures, we have deployed experts with abundant experience as MHBKs IT System Divisions Executive Officer and IT System Divisions Manager as of June 2011. In addition, we will focus on the succession of skills, etc., by continuing to deploy the key employees who have experienced the recent system failures in their present posts. (For our groups human resource management framework, refer to I.2.(3) in our Business Improvement Plan),
To cultivate human resources, including succession of know-how and skills related to key systems such as our core banking system and settlement system, we will implement and execute training programs for systems personnel that include crisis simulation.
In order to establish a framework that is both flexible and effective at a time of crisis, we will review the functions and improve maintenance, recovery framework post crisis and collaboration among MHIR, MHOS and us from a multifaceted perspective, in coordination with MHFG (refer to the Business Improvement Plan for MHFG (I.2.(2)) below for details).
Noting effects of changes in the environment, etc., we have increased issue points for our system audit related to the existing core banking system.
We will continuously monitor the core banking system in-depth, including operation and management functions, enhance our understanding of potential risks, reflect such understanding on our risk evaluation, and strengthen our audit function, taking into account potential risks and effects on other operations/systems.
We will assess the improvement and progress achieved at business functions through monitoring and audits. For those items in need of group-wide audit, a co-audit with our audit department will be conducted.
For the current fiscal year, given the failure in the core banking system, we will factor in our efforts to enhance skills related to the core banking system to our Education/Training Plan and will conduct external training programs.
We will utilize external auditors to achieve strict assessment of improvements and counter-measures by the business functions.
Refer to the Business Improvement Plan for MHFG (item I.3.(1)) below.
In order to take all possible measures to prevent any recurrence, we will perform a comprehensive inspection of systems risk to strictly identify any potential risk associated with our existing system, taking into account the external environment after the designing of the system.
In light of the recent system failures, we will comprehensively identify risk factors as follows based on the viewpoint of failure prevention and response to failure.
Given the recent system failures, we understand that our risk control towards external risk factors such as the one set forth below was insufficient. We will perform inspections and evaluations focusing on such external risk factors.
Given the recent system failures, we understand that our risk controls for our post-failure responses have been insufficient. We will perform inspections and evaluations focusing on the risk set forth below. In order to enhance the effectiveness, we will utilize external auditors.
We will focus on the core banking system and the settlement system and perform the following inspections.
From a post-failure response point of view, we will develop check items and risk scenarios that highlight systems risk and formulate an action plan accordingly. Upon formulation of such action plan, we will discuss with experts such as external consultants and reflect their comments. We will perform comprehensive inspections based on such formulated plan.
Given the results of the inspection, in order to ensure sufficiency, we will utilize external auditors to evaluate systems risk and will establish priorities for system improvements or review of the contingency plan, etc., based on the size of the risk.
We will incorporate perspectives and items of the comprehensive inspection in our existing Systems Risk CSA and will develop an action plan aiming for continuous improvement and firm establishment for the year ahead.
Based on the order of priority established pursuant to 1.(2)(iii) above, we will develop improvement plans for the system contingency plans and business contingency plans and execute such improvement plans accordingly.
With respect to giving instructions to branches, we will do so in a timely and appropriate manner based on accurate information gathered based on the revised immediate post-crisis information communication/sharing flow chart. With respect to measures for posting on our website, we will prepare a process for timely and appropriate website disclosure during a crisis.
In preparation for a sharp increase in inquiries and complaints, we will establish procedures for the call centers to timely and appropriately provide back-up during a crisis.
In order to swiftly consolidate and share large numbers of complaints, etc., that our branches, call centers and group companies, etc., receives, we will assess the below matters and reflect them in relevant internal rules and regulations.
Based on an analysis of complaints we received, each relevant business unit developed improvement measures with respect to items in need of improvement in terms of crisis response.
After analyzing the types and extent of costs/damages, scope of coverage (including customers of other banks) and method of notification to customers, we have implemented specific additional measures, such as posting additional material in the Q&A section of our website.
In order for the relevant divisions to coordinate and make possible instructions to our branches and customer service that sufficiently takes customer protection into account, even at the initial stage of crises such as system failures, we will revise relevant internal rules and regulations related to management of customer protection, etc., included in the standards related to the management of product explanations, as needed, and will enhance our management framework.
MHBK will monitor the progress of the Business Improvement Plan on a monthly basis in management meetings, etc., and on a quarterly basis in board meetings.
With regards to the improvements and counter-measures set forth in the Business Improvement plan, the audit division will evaluate and assess the execution status after the implementation of specific measures by the relevant division, followed by reporting to the business audit committee and the Board of Directors (quarterly).
The Business Improvement Plans of MHFG
(Note: Brackets [ ] indicate implementation deadlines)
The following Business Improvement Plan includes items to be implemented by us as well as those to be implemented by our principal group companies such as MHBK, pursuant to the instructions given by us as the business administration company. With regards to those items instructed by us to our principal group companies, we will request reports from the respective group companies on the status of implementation. We will then report to our management after assessing the content.
We will assess the extent of the progress made by MHBK in implementing Improvements and counter-measures regarding the defectiveness of system functions as preventive measures against system failures similar to the recent failures.
As discussed in 2.(1) below.
<Improvement of the system contingency plan>
We will identify the causes for the recent system failures and system failures that occurred in the past and the risks that can be presumed based on system structure, etc.
Upon identifying scenarios that need to be implemented in common by the group, and after inspecting the preparation status of the system contingency plans, we will organize scenarios for each system and enhance our group-wide scenarios.
We will impress upon the principal group companies the group-wide common understanding regarding the system contingency plans, and the relevant rules and regulations of the principal group companies will be revised.
Based on B. above, we will organize and methodically prepare the system contingency plans that require priority.
We will improve the effectiveness of the system contingency plans by organizing our approaches and priorities regarding group-wide training and individual group company training and instructing each principal group company to conduct training under stress scenarios, etc.
Pursuant to the results of review described in (i) above, we will revise the rules and regulations regarding the preparation of the system contingency plans.
Pursuant to the results of review described in (i) above, we will revise the rules and regulations regarding the preparation of the system contingency plans so that training under appropriate stress scenarios is conducted regularly.
We will establish a framework to evaluate the necessity of a review of the existing system contingency plans during our system project development process (commencement, design, testing and release phases).
<Improvement of the business contingency plan>
We will instruct and follow through with our principal group companies to revise the content to include more detail regarding explanations to customers and procedures for each local office, etc.
We will instruct and follow through with our principal group companies to clarify and widely impress upon issues regarding sharing of information, method of coordination, function allocations, etc., upon activation of the business contingency plans.
We will instruct and follow through with our principal group companies to conduct training on settlement operations as they have a significant effect on our customers, and we will evaluate the effectiveness based on the opinions from the local offices.
<Customer relations / public relations, etc.>
We will establish the Improvement in Information Transmissions Subcommittee (tentative name) to enhance our information transmission capabilities (public announcements, etc.) towards our various stakeholders, including our customers.
We will strengthen our centralized information management framework by revising the manuals of our and our principal group companies relevant divisions to state that information of the group upon a crisis is to be consolidated and confirmed in advance by us.
We will re-emphasize the purpose of the Public Relations Manuals, which sets forth responses towards media, etc., and improve and expedite our information control, and will also aim to improve the reporting and communication framework within the group.
For the purposes of evaluating the effectiveness of the revised framework/regulations, etc., reflecting the improvements and counter-measures based on the recent failures, we will assess the coordination and sharing of information among relevant divisions, regulatory reporting and external public announcements during a crisis through group-wide training as described below.
<Improvements in crisis response preparedness>
We will evaluate and implement MHBKs review of their internal crisis system and will instruct other principal group companies to conduct similar reviews.
We will evaluate and implement MHBKs review of their current immediate post-crisis information communication/sharing flows for each headquarter division and will instruct other principal group companies to conduct similar reviews.
For the purposes of evaluating the effectiveness of the revised systems/regulations, etc., reflecting the improvements and counter-measures against the recent failures, we will have a group-wide trainings assuming system failures
<Improvements in personnel training and appropriate human resources allocation>
As discussed in 2. (2), (3) (i) below.
<Improvement of effectiveness of auditing>
By the end of March 2012, we will develop a basic plan related to the development of next-generation IT systems, contemplated by around the end of March 2016, as well as policies on unification of IT utilization process, aiming full unification of system platform of banking business. [the end of March 2012]
In addition to accelerating development of the next-generation IT systems, the Next-Generation IT Systems Promotion Office will perform follow-ups on the Business Improvement Plan, including stable operation of the system.
With respect to the allocation of development promotion functions and operation functions in relation to systems, in order for the group banks to take full responsibility regarding the operation of their systems, we will review the allocation among the banks IT divisions, development companies and operating companies.
We will reorganize allocation of roles among MHBK and systems-related group companies to review the framework that effectively functions during a crisis, confirm effectiveness of maintenance/failure restoration framework and coordination, and identify the responsibilities among the subsidiaries.
In order to maintain proper tension between MHBK and MHIR, we will review existing service agreements and will reflect results of such review to the service agreements entered among other group companies.
We will promote visualization of IT skills in combination with business experience and general skills.
We will conduct methodical training under group-wide stress scenarios based on risks inherent in the current system and will assess and improve our crisis response capabilities.
We will develop a framework to train and place personnel, through human resource rotations and training, who have broad knowledge to properly respond to crisis situations.
Given the recent system failures, we have deployed experts with abundant experience as MHBKs IT System Divisions Executive Officer and IT System Divisions Manager as of June 2011 (for description of business function of MHBK and MHCBs IT System Divisions Executive Officer, refer to (4)(iii) below).
In addition, we will focus on the succession of skills, etc., by continuing to deploy the key employees who have experienced the recent system failures in their present posts.
We will develop a framework for each principal group company to convene personnel with system development experience and experts under following crisis situations:
We, as a group, will develop a plan to cultivate IT personnel who can manage with an understanding of both the banking business and the overall system structure.
In connection with the unprecedented crisis caused by the earthquake that struck Eastern Japan, it was extremely regrettable that we were not able to fulfill our mission as a financial institution to protect the bloodstream of the economy.
Due to the recent computer system failures, our settlement transactions such as fund transfers and automatic debit transactions were malfunctioned, and deposits to the accounts of corporate and retail customers, including other banks customers, were delayed, and our ATMs, various EB services and Mizuho Direct services were shut down, causing a great inconvenience to many customers and the society at large.
Following the 2002 systems failure, this is the second time that our systems failed, and we are deeply sorry for having had made such a serious impact on our countrys financial system.
As we take to heart our responsibility in connection with the recent computer system failures, we have clarified where the responsibility lies. (released as of May 23, 2011)
With respect to the concentration of large data volumes, which triggered the recent crisis, MHBK has performed focused inspection of status of implementation of preventative measures.
Based on the results of inspections by MHBK, we have confirmed that appropriate measures are in place to prevent system failures related to large data volumes such as the recent system failures.
We will develop deployment plan of comprehensive inspection of systems risk for each of our group companies, including items covered in the focused inspection performed by MHBK.
Based on the above deployment plan, we will instruct our group companies to perform comprehensive inspection of systems risk and promote the identification of systems risk for the group as a whole.
Based on the results of inspection and evaluation by each group company, we will evaluate the systems risk status of our group as a whole and develop improvement objectives that include systems-related investments and improvement plans that include improvement priorities.
Based on the comprehensive inspection, we will develop an action plan to prepare a continuous framework for Systems Risk CSA.