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40-513: Fuyo Group ( 芙蓉グループ , Fuyō Gurūpu ) is a Japanese keiretsu descended from the Yasuda zaibatsu , Asano zaibatsu and Okura zaibatsu . They were a major business grouping in Japan up to World War II . In 1948, Yasuda was dismantled, with its key financial arm Yasuda Bank becoming Fuji Bank . The modern Fuyo Group was first developed in the early 1960s around Marubeni and Fuji Bank, paralleling

80-480: A core bank; this system helps insulate each company from stock market fluctuations and takeover attempts, thus enabling long-term planning in projects. The prototypical keiretsu appeared during the Japanese economic miracle which followed World War II, amid the dissolution of family-controlled vertical monopolies called zaibatsu . The zaibatsu had been at the heart of economic and industrial activity within

120-453: A growing corporate acquisition industry in Japan, as companies are no longer able to be easily "bailed out" by their banks, as well as rising derivative litigation by more independent shareholders. The keiretsu model is fairly unique to Japan. However, many diversified non-Japanese businesses groups have been described as keiretsu , such as the Virgin Group (UK), Tata Group (India),

160-536: A horizontal keiretsu (also known as financial keiretsu ) is that it is set up around a Japanese bank through cross-shareholding relationships with other companies. The bank assists these companies with a range of financial services. The leading horizontal Japanese keiretsu , also referred to as the "Big Six", include: Fuyo , Sanwa , Sumitomo , Mitsubishi , Mitsui , and DKB Group . Horizontal keiretsu may also have vertical relationships, called branches. Horizontal keiretsu peaked around 1988, when over half of

200-694: A large minority shareholder in the Master Trust Bank of Japan , Morgan Stanley in the United States, Security Bank in the Philippines, and Vietinbank in Vietnam. It retains strong links with the Mitsubishi Group and is often described as one of that group’s "Three Great Houses", together with Mitsubishi Corporation and Mitsubishi Heavy Industries . MUFG is Japan's largest financial group and one of

240-498: A number of larger companies. Harvard Law School professor J. Mark Ramseyer and University of Tokyo professor Yoshiro Miwa have argued that the postwar keiretsu are a "fable" created by Marxist thinkers in the 1960s so as to argue that monopoly capital dominated the Japanese economy. They point to the sparsity and tenuousness of cross-shareholding relationships within the keiretsu , the inconsistency in members' relationships with

280-716: A policy bank, reorganized after World War II as Bank of Tokyo ), Sanwa Bank (est. 1933 by merger of prior institutions), and Tokai Bank (est. 1941 by merger). MUFG holds assets of around US$ 2.7 trillion as of 2024 and is the parent company of fully-owned MUFG Bank (branded Bank of Tokyo Mitsubishi UFJ or BTMU until July 2018 ), Mitsubishi UFJ Trust and Banking Corporation , Mitsubishi UFJ Securities , Mitsubishi UFJ Capital , and MUFG Americas Holdings Corporation ; majority shareholder of Bank Danamon in Indonesia, Bank of Ayudhya in Thailand, and Mitsubishi UFJ NICOS in Japan; and

320-541: Is a Japanese bank holding and financial services company headquartered in Chiyoda, Tokyo , Japan. MUFG was created in 2005 by merger between Mitsubishi Tokyo Financial Group ( 株式会社三菱東京フィナンシャル・グループ , Kabushiki kaisha mitsubishi tōkyō finansharu gurūpu ) and UFJ Holdings (株式会社UFJホールディングス; kabushikigaisha yūefujei hōrudingusu ). These two groups in turn brought together multiple predecessor banks including Mitsubishi Bank (est. 1880), Yokohama Specie Bank (est. 1880 as

360-448: Is often loose and often not something considered in day-to-day decision making by its members. Vertical keiretsu (also known as industrial or distribution keiretsu ) are used to link suppliers, manufacturers, and distributors of one industry. Banks have less influence on vertical keiretsu . Examples of this type include Toyota , Toshiba , and Nissan . One or more sub-companies, arranged in tiers of importance, are created to benefit

400-529: The 2008 ALB Japan Law Awards , Mitsubishi UFJ was crowned: In April 2011, MUFG and Morgan Stanley entered into an agreement to convert MUFG's outstanding convertible preferred stock in Morgan Stanley into Morgan Stanley stock. In June 2011, MUFG took a 9.99 percent stake in Lynas Corp, an Australian rare earths developer. On April 1, 2018, the bank was renamed to MUFG Bank Ltd. This name change aligned

440-597: The Empire of Japan since Japanese industrialization accelerated during the Meiji Era . They held great influence over Japanese national and foreign policies which only increased following the Japanese victories in the Russo-Japanese War of 1904–1905 and World War I . During the inter-war period the zaibatsu aided Japanese militarism and benefited from their conquest of East Asia by receiving lucrative contracts. After

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480-499: The Financial Stability Board . MUFG was formed by three successive mergers in a sequence that lasted less than a decade, respectively between Bank of Tokyo and Mitsubishi Bank in 1996, between Sanwa Bank , Tokai Bank and Toyo Trust and Banking in 2000-2002, and between the two resulting entities in 2005. The institutions involved in these mergers combined multiple threads of Japanese financial history, going back to

520-623: The Yokohama Specie Bank in 1880, while Mitsubishi Bank had had a stronger focus on domestic corporate and retail banking. Both banks were relatively healthy in the wake of the Japanese asset price bubble . The merged bank was the fully-owned subsidiary of Mitsubishi Tokyo Financial Group (MTFG), based in Tokyo. Until the Tokyo-Mitsubishi merger in 1996, Sanwa Bank , which was based in Osaka and

560-433: The keiretsu and acted as a monitoring and emergency bail-out entity. One effect of this structure was to minimize the presence of hostile takeovers in Japan, because no entities could challenge the power of the banks. Although the divisions between them have blurred in recent years, there have been eight major postwar keiretsu . Toyota is considered the biggest of the vertically integrated keiretsu groups, although

600-621: The surrender of Japan the Allied occupation forces partially attempted to dissolve the zaibatsu which had worked closely with the militarists during the first half of the 20th century and during the war. However, the United States government later rescinded those orders in an effort to reindustrialize Japan as a bulwark against communism in Asia, so the zaibatsu were never completely dissolved. The two types of keiretsu , horizontal and vertical , can be further categorized as: The primary aspect of

640-632: The yakuza crime syndicates. The takeover of UFJ by the Mitsubishi Tokyo Financial Group was challenged by the Sumitomo Mitsui Financial Group which launched a competing takeover bid. MTFG ultimately prevailed in the fight, which appeared to signal an end to the clubby atmosphere that had prevailed in Japan's postwar banking industry. MUFG and SMFG eventually settled the legal dispute for 2.5 billion yen in late 2006. The merged holding company MUFG, based on Tokyo,

680-429: The "main banks" of each keiretsu , and the lack of power and reach of the zaibatsu alumni "lunch clubs" which are often argued to form a core of keiretsu governance. By April 2015, U.S. Trade Representative Michael Froman and Japanese Economy Minister Akira Amari, representing the two largest economies of the 12-nation Trans-Pacific Partnership , were involved in bilateral talks regarding agriculture and auto parts,

720-590: The "two largest obstacles for Japan." These bilateral accords would open each other's markets for products such as rice, pork and automobiles. During the two-day ministerial TPP negotiating session held in Singapore in May 2015, veteran US negotiator Wendy Cutler and Oe Hiroshi of the Japanese Gaimusho held bilateral trade talks regarding one of the most contentious trade issues, automobiles. American negotiators wanted

760-441: The 2000s. For instance, many troubled Japanese companies are faced with a new reality in which receiving financial support from their main banks are getting harder and unlikelier than ever before. The companies include Sharp Corporation and Toshiba , both the iconic Japanese corporations that were forced to accept foreign investment in their aftermath of financial difficulties in 2010s. This changed environment, in turn, has led to

800-578: The Colombian Grupo Empresarial Antioqueño and the Venezuelan Grupo Cisneros . The automotive and banking industries have created broad cross-ownership networks across nations, but the national companies are normally independently managed. Banks cited as being central to keiretsu -like systems include Deutsche Bank and some keiretsu -like systems, generally referred to as trusts , were created by investment banks in

840-545: The Japanese to open their entire keiretsu structure, a cornerstone of the Japanese economy, to American automobiles. They wanted Japanese dealer networks such as Toyota, Nissan, Honda, Mitsubishi, and Mazda to sell American cars. The successful conclusion of these bilateral talks was necessary before the other ten TPP members could complete the trade deal. Mitsubishi UFJ Financial Group Mitsubishi UFJ Financial Group, Inc. ( MUFG ; 株式会社三菱UFJフィナンシャル・グループ , Kabushiki gaisha Mitsubishi Yūefujei Finansharu Gurūpu )

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880-475: The New York Stock Exchange in 1999. In 2008, BTMU purchased all of the outstanding shares of UnionBanCal. BTMU moved its New York-based banking operations to Union Bank and renamed the company MUFG Union Bank in 2014. BTMU was investigated by New York banking regulators over its role in routing payments for Iranian customers through its New York branch in violation of U.S. sanctions. BTMU settled with

920-680: The United States such as JP Morgan and Mellon Financial / Mellon family beginning in the late 19th century (roughly the same period they were created in Japan), but they were largely curtailed through anti-trust legislation championed by Theodore Roosevelt in the early part of the 20th century. A form of keiretsu can also be found in the cross-shareholdings of the large media companies throughout most developed nations. These are largely designed to link content producers to particular distribution channels, and larger content projects, such as expensive movies, are often incorporated with ownership spread across

960-415: The alliances vertically integrated, as well. In this period, official government policy promoted the creation of robust trade corporations that could withstand heavy pressures from intensified trade competition. The major keiretsu were each centered on one bank, which lent money to the keiretsu member companies and held equity positions in the companies. Each bank had great control over the companies in

1000-454: The company is rather considered as a "emerged" keiretsu , along with Softbank , Seven & I Holdings Co. The banks at the top are not as large as normally required, so it is actually considered to be more horizontally integrated than other keiretsu . The Japanese recession in the 1990s had profound effects on the keiretsu . Many of the largest banks were hit hard by bad loan portfolios and forced to merge or go out of business. This had

1040-741: The development of the DKB Group and Sanwa Group . Fuji Bank orchestrated the merger of Marubeni with Takashimaya in 1955 in order to create a strong trading company partner for Fuji's customers. Group presidents began meeting regularly in 1964. Unlike the keiretsu that developed from the Mitsubishi , Mitsui and Sumitomo zaibatsu remnants, the Fuyo Group was intended to be open to other businesses as well as legacy zaibatsu businesses. Fuji Bank merged with Dai-Ichi Kangyo Bank and Industrial Bank of Japan in 2000 to form Mizuho Financial Group . Following

1080-665: The early Meiji era . MUFG incorporates several of the National Banks in Meiji Japan , which were numbered in accordance with their chronological date of establishment between 1873 and 1880: Mitsubishi Bank and the Bank of Tokyo merged in 1996 to form the Bank of Tokyo-Mitsubishi, which at that point was the world's largest bank in terms of total assets. The Bank of Tokyo had historically focused on foreign exchange business since its foundation as

1120-636: The effect of blurring the lines between the individual keiretsu : Sumitomo Bank and Mitsui Bank , for instance, became Sumitomo Mitsui Banking Corporation in 2001, while Sanwa Bank (the banker for the Hankyu-Toho Group) became part of Bank of Tokyo-Mitsubishi UFJ . Generally, these causes gave rise to a strong notion in the Japanese business community that the old keiretsu system was not an effective business model, and led to an overall loosening of keiretsu alliances. While they still exist, they are not as centralized or integrated as they were before

1160-435: The employees of its predecessor companies. UFJ was one of the largest shareholders of Toyota . The Chairman of Toyota was a director on its board during the financial scandals and indictments of three UFJ executives. In July 2004, UFJ Holdings, by then Japan's fourth-largest financial group, offered to merge with the Mitsubishi Tokyo Financial Group. UFJ had been accused by the government of corruption and making bad loans to

1200-498: The merger and the combined company was to be called United Financial Holdings. The merger was completed in 2002 and the new bank was officially named UFJ Bank Ltd. UFJ Bank was headquartered in Nagoya , the historical headquarters of Tokai Bank, while its parent UFJ Holdings (UFJH) was based in Osaka . During its short life, the group was plagued by bad debt problems and by infighting between

1240-419: The merger, the Fuyo Group became centered on Marubeni, Meiji Yasuda Life Insurance and Yasuda Fire & Marine Insurance (now Sompo Japan ). Fuyo is Japanese for " hibiscus " and is also used as an alternative name for Mount Fuji , the tallest mountain in Japan and the namesake for Fuji Bank. Keiretsu The members' companies own small portions of the shares in each other's companies, centered on

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1280-600: The parent company. Major suppliers form the second tier beneath the parent, and smaller manufacturing companies make up the third and fourth tiers. Those at the highest levels are most profitable, and most insulated from fluctuations in the market. Some vertical keiretsu may belong to one or another horizontal keiretsu . Some vertical keiretsu are family businesses , such as the Hitotsubashi/Shogakukan , Otowa/Kodansha and APA groups. Studies have found these vertical keiretsus, particularly those that belong to

1320-527: The same horizontal keiretsu , are more likely to form alliances than the other types or even those companies where one or two have keiretsu affiliations. Vertical keiretsu is considered an effective and competitive organizational model in the car industry. During the occupation of Japan , under the Supreme Commander of the Allied Powers , General Douglas MacArthur , a partially successful attempt

1360-465: The state for $ 250 million in 2013. A second settlement was reached for $ 315 million in 2014 after it was found that PricewaterhouseCoopers had altered an investigation report on the issue; PwC itself was fined $ 25 million in relation to the matter. In September 2008, MUFG signed a letter of intent with Morgan Stanley to form an alliance and purchase 20% of the American firm. In 2008 at

1400-550: The two banking giants, caused the merger of the banks to be postponed for three months. The trust banking and securities units of MTFG and UFJ were merged according to the original schedule on 1 October 2005. Mitsubishi Bank and the Bank of Tokyo each had significant banking subsidiaries in California ( Bank of California and Union Bank respectively) before their merger. At the time of the merger, these U.S. banks also merged to form UnionBanCal Corporation . BTM listed UnionBanCal on

1440-666: The value in the Japanese stock market consisted of cross-shareholdings. Since then, banks have gradually reduced their cross-shareholdings. The Japanese corporate governance code, effective from June 2015, requires listed companies to disclose a rationale for their cross-shareholdings. Partly as a result of this requirement, the four Japanese "megabanks" descended from the six major keiretsu banks (namely Mitsubishi UFJ Financial Group , Sumitomo Mitsui Financial Group , Sumitomo Mitsui Trust Group and Mizuho Financial Group ) have indicated plans to further reduce their balance of cross-shareholding investments. Membership in horizontal keiretsu

1480-410: The world's ten largest bank holding companies holding around US$ 1.5 trillion (JP¥227 trillion) in deposits as of April 2024. In Japan, it is the largest of the three so-called megabanks with $ 2.9 trillion in total assets at end-March 2023, ahead of SMBC Group ($ 2.0 trillion) and Mizuho Financial Group ($ 1.9 trillion). It has been consistently listed as a systemically important bank by

1520-412: Was formed on 1 October 2005 from the merger of MTFG and UFJH. The two banks, Bank of Tokyo-Mitsubishi and UFJ Bank, merged on 1 January 2006 to form MUFG Bank . The latter transaction was originally scheduled to take place on 1 October 2005, the same day that the parent companies were merged. However, pressure from Japan's Financial Services Agency , which wanted to ensure the smooth systems integration of

1560-473: Was made to dissolve the zaibatsu in the late 1940s. Sixteen zaibatsu were targeted for complete dissolution, and 26 more for reorganization after dissolution. However, the companies formed from the dismantling of the zaibatsu were later reintegrated. The dispersed corporations were reinterlinked through share purchases to form horizontally integrated alliances across many industries. Where possible, keiretsu companies would also supply one another, making

1600-584: Was the anchor of the Sanwa Group keiretsu , had been considered the strongest bank in Japan, and it had aimed to be the world's largest bank during the "bubble era". By 2000, however, Sanwa was the fourth largest bank in Japan. It entered into merger talks with two other large banks, Asahi Bank and Tokai Bank , to create the world's third-largest bank by assets. Asahi pulled out of these talks later that year, and eventually became part of Resona Holdings . By 2001, The Toyo Trust & Banking Co. had been added to

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