The Japanese regulator is to investigate into whether the three largest banks, Mitsubishi UFJ, Sumitomo Mitsui, and Mizuho made loans to gangsters known as ‘yakuza’.
The Financial Services Authority (FSA) announced that the investigation will start on 5 November after Japan’s second biggest bank, Mizuho, admitted lending over 200m yen ($2m) to the yakuza. 54 executives have been disciplined, but the bank was cleared of attempting a cover-up.
Lawyers looking into the scandal at said: "Many officials and board members were aware of, or were in a position to be aware of, the issue."
They also added that Mizuho had thought their compliance division "was taking care of it."
The yakuza gangs are not actually illegal in themselves but are known to be involved in organised crime such as prostitution, drug trafficking and racketeering.
Amongst the figures who have been disciplined are chairman Takashi Tsukamoto, who is resigning as chairman but remains head of the holding company and president Yasuhiro Sato, whose salary will be cut for six months.