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Deposit Insurance Corporation of Japan (DIC)

Confidence: Likely Updated 2026-05-25 Review by 2026-11-25 Sources 4 Machine-translated Original (JA)
#JapanFG#deposit-insurance#financial-safety-net#resolution#government
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This entry sits under financial-regulators INDEX. Read it against Non-life Insurance Policyholders Protection Corporation of Japan and Life Insurance Policyholders Protection Corporation for parallel safety-net peers, and against Financial Services Agency (FSA) / Bank of Japan (BoJ) for the broader system / regulatory boundary.

TL;DR

Japan’s sole special corporation responsible for deposit insurance and failure resolution. Established under the 1971-07 Deposit Insurance Act. It single-handedly covers insurance payout (pay-off) + financial assistance + bridge bank + purchase of specified hard-to-recover claims + management and asset purchase of failed financial institutions. Its funders are a tripartite contribution by the government + the Bank of Japan + private financial institutions (each contributing the equivalent of 1/3 ). The chairman is appointed by consultation among the Minister of Finance, the Commissioner of the FSA, and the Governor of the Bank of Japan. Through public-fund injections and temporary nationalization for cases such as 2003 Resona HD and 2003 Ashikaga Bank, it functioned in effect as the last line of defense of the financial safety net during the banking crises of the Heisei era.

1. Legal basis / establishment

Official name: 預金保険機構 (Deposit Insurance Corporation) English name: Deposit Insurance Corporation of Japan (DIC) Legal basis: Deposit Insurance Act (昭和 46 年 Act 第 34 号) Established: 1971-07-01 Headquarters: Yurakucho 1-12-1 , Chiyoda-ku, Tokyo Business type: Authorized corporation (analogous to a special corporation) Supervising authorities: FSA / Ministry of Finance / Bank of Japan (trinity governance)

Contribution structure

Government                    ── 1/3  equivalent ── Deposit Insurance Corporation
Bank of Japan                 ── 1/3  equivalent ──
Private financial institutions ── 1/3  equivalent ── (megabanks, regional banks, shinkin, shinkumi, etc.)

Key chronology

Year/MonthEvent
1971-07Deposit Insurance Act enters into force; Deposit Insurance Corporation established (built with reference to the US FDIC)
1986Introduction of the financial assistance method (adding schemes such as rescue mergers to failure resolution)
1996Jusen Resolution Act enacted → Housing Loan Administration Corporation (HLAC) established
1998-10Financial Revitalization Act / Early Strengthening Act enacted → public-fund injection framework established
2000-04Resolution and Collection Corporation ([[financial-regulators/rcc
2001-04Lifting of the pay-off freeze, stage 1 (time deposits)
2002-04Full removal of pay-off restrictions → postponed to the following year
2003-05**[[megabanks/resona-hd
2003-11**[[regional-banks/ashikaga-hd
2005-04Full implementation of pay-off (other than settlement deposits, principal up to 1,000 万円 + interest is protected)
2010-09[[financial-regulators/japan-shinko-bank
2014Amendment of the Deposit Insurance Act → orderly resolution (resolution of financial institutions of systemic importance, etc.)
2020～COVID-crisis response; continued operation of the Act on Strengthening Financial Functions

2. Business areas

BusinessContentExample of invocation
Insurance payout (pay-off)Direct payment to depositors of a failed financial institution of principal up to 1,000 万円 + interest2010-09 [[financial-regulators/japan-shinko-bank
Financial assistanceMonetary grants, loans, asset purchases, etc. to rescuing financial institutionsMany in the latter half of the 1990s
Special crisis-management bankTemporary nationalization of a failed financial institution, with the DIC managing it as shareholder2003 Ashikaga Bank
Bridge bankEstablishment of an interim succeeding bank until a receiving candidate is foundDai-ni Nippon Succeeding Bank, etc.
Public-fund injectionCapital injection via preferred shares / subordinated bonds under the Act on Strengthening Financial Functions, etc.2003 Resona, various Heisei financial-crisis cases
Asset purchasePurchase of non-performing loans / specified hard-to-recover claims via the RCCVia [[financial-regulators/rcc
Strengthening of financial functionsSupport for voluntary capital reinforcement of small and mid-sized financial institutions (Act on Strengthening Financial Functions)2008-09 post-Lehman
Special provisions for financial instruments business operatorsArea of coordination with the Investor Protection FundLimited

Ecosystem of principal institutions

                 Deposit Insurance Corporation (DIC)
                       │
            ┌──────────┼──────────┐
            │          │          │
        [[financial-regulators/rcc|RCC]]   Special crisis-management bank  Bridge bank
   (Resolution and Collection Corp.)  (temporary-nationalization receiver)  (interim succeeding bank)
            │
    NPL purchase / collection

2003 Resona rescue (largest-class public-fund injection)

  • Resona HD was on the verge of falling below the 4% domestic capital-adequacy standard
  • Invocation of the measure under Article 102 , paragraph 1 第 1 号 of the Deposit Insurance Act (capital injection)
  • Public-fund injection of approximately 1.96 兆円 → de facto nationalization
  • Public funds fully repaid by 2015 (including profit, a net gain confirmed for taxpayers)

2003 Ashikaga Bank temporary nationalization

  • A regional bank based in Tochigi Prefecture was found to be insolvent
  • Invocation of the measure under Article 102 , paragraph 1 第 3 号 of the Deposit Insurance Act (special crisis management)
  • **The DIC acquired all shares → management → sale to a Nomura-affiliated receiver in 2008 **
  • The only case in Japan to complete the full course of “bank nationalization → full privatization”

2010 Japan Shinko Bank, first invocation of pay-off

  • The Shinko Bank, established by former BOJ Policy Board member Takeshi Kimura, failed
  • First invocation of pay-off in Japan (the first in the postwar period)
  • Depositors above 1,000 万円 took a partial haircut → a real-world application of the principle that “other than settlement deposits, principal + interest up to 1,000 万円”

4. International positioning

  • The US FDIC (Federal Deposit Insurance Corporation) was adopted as a reference in the 1970 年s, but unlike the US, its distinctive feature is that it unifies the insurance function + failure-resolution function + non-performing-loan disposal function
  • A member of IADI (International Association of Deposit Insurers)
  • In times of crisis it functions complementarily with Bank of Japan (BoJ) special lending (lender-of-last-resort function)

Sources

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