Note 1-44

(44) Financial institutions, led by major banks, are pushing for reorganization of the industry. The government, for its part, is striving to strengthen the financial system. As a result of the intensive reviews of regional financial institutions carried out ahead of the proposed abolition of full deposit guarantee, 2 regional banks, 13 shinkin (credit association) banks and 30 credit cooperatives went bankrupt in the last half of FY2001 alone. In July 2002, the Financial Services Agency announced a draft of "Measures to promote merger and consolidation of financial institutions with emphasis on regional financial institutions." The report lists measures 1） Developing environment facilitating merger and consolidation 2） Measures to further strengthen financial system through improving profitability and soundness.