Banks With ‘Shattered’ Business Models Warned by Japan’s FSA (1)

Japan’s financial regulator is running out of patience with regional banks that are struggling to adapt to an increasingly grim business environment.

The Financial Services Agency has targeted some local lenders for “intensive dialogue,” which could lead to regulatory action if they fail to convince it of their viability, Commissioner Toshihide Endo said. He hinted at the need for management changes at banks that don’t change their strategies.

Toshihide Endo speaks at a symposium in Tokyo in 2019.

Photographer: Kiyoshi Ota/Bloomberg

“There has been no innovation,” Endo, 61, said in an interview in Tokyo. The old practice of making money by simply taking deposits and lending them out at a higher rate ...