Mizuho Financial Group - History

History

Mizuho was established originally as Mizuho Holdings, Inc. by the merger of Dai-Ichi Kangyo Bank, Fuji Bank and the Industrial Bank of Japan in 2000.

Mizuho Financial Group, Inc. was established in January 2003 to become the parent company to Mizuho Holdings, Inc. in preparation for its restructuring of businesses. Subsequently, through a share exchange on March 12, 2003, Mizuho Financial Group became the sole shareholder of Mizuho Holdings, which in turn served as the holding company of all of the group's banking and securities units.

On October 1, 2005, all subsidiaries of Mizuho Holdings were transferred to the direct control of Mizuho Financial Group. Mizuho Holdings, no longer a bank holding company, was then renamed Mizuho Financial Strategy, which now focuses on providing advisory services.

Mizuho, through its operations in New York became involved in the subprime mortgage crisis and lost 7 billion dollars on the sale of collateralized debt obligations backed by subprime mortgages. Its entry was late, in December 2006; it did not participate in gains; only suffered losses. It is the Asian bank which suffered the most losses due to the crisis. The venture into this field has been traced to the employment of Alexander Rekeda, a specialist in this field hired away from Calyon, a unit of Crédit Agricole. Rekeda was made "head of structured credit in the Americas" where he floated several deals that turned toxic. He was later fired and Mizuho shut down its US CDO business. Examples of these CDOs included the 'Aardvark', 'Tigris', and 'Delphinius' CDOs. The latter two involved the Magnetar hedge fund. Ironically, Calyon had sued Mizuho for hiring away Rekeda and other CDO experts in 2007.