When the going gets miserable in Japanese banking, the head of the firm gets going.
Case in point: Mitsubishi UFJ Morgan Stanley Securities President Fumiyuki Akikusa, who resigned along with five executives last month. The move was to “take responsibility” for the US$1.77bn in trading losses sustained by the struggling US-Japanese joint venture reported The Wall Street Journal.
One for the family
High profile resignations like Akikusa’s are “very common” in Japan, according to one Tokyo-based recruiter. Yoshiki Kumazawa, manager, front office banking recruitment, Morgan McKinley, says they typically occur in domestic banks rather than the foreign institutions.
Such practices aren’t likely to go anyway soon either, he reckons. That’s because most senior executives in Japanese banks have devoted their entire professional career to one firm after graduating from university, and their company is viewed as a “larger adopted family.”
Kumazawa says: “It is the accepted standard in Japanese culture that the head of the group will take responsibility for any mistakes. Once that happens, public perception is that all is forgiven.”
“It is arguably an adaptation of committing hara-kiri, the ritual suicide performed by samurais in olden times. In modern day Japanese banks, it is public resignations.”
Is it the end of the road once these top bankers have quit? Well, not really.
It is not unheard of for some of them to remain in advisory or consulting positions for the firm they have resigned from. Alternatively, they may secure a position within a family company (zaibatsu).
More Mitsubishi UFJ Morgan Stanley Securities employees are expected to go following these resignations. According the Wall Street Journal, the firm will cut some 750 jobs this financial year and shut down 12 branches.
Kumazawa says it’s too soon to tell how the job cuts will affect the Japanese employment market. He says: “There are certainly jobs opportunities currently, especially since bonus season has recently ended, which will certainly result in more movement of professionals in the market.”