Daiwa Bank - Bank Management Report

Daiwa Bank Bank Management Report

Contents

Introduction
Daiwa Bank, previously known as the Osaka Nomura Bank, was founded by Tokushichi Nomura in 1918. The bank operated both trust and regular banking services, and its core business focus on providing financing to small but promising companies.
In 1926, its growing securities division was spun off to create Nomura Securities, and Osaka Nomura Bank was subsequently renamed to Daiwa Bank in 1948. (Daiwa means 'great harmony ' in Japanese). As the Japanese banking industry grew, Daiwa expanded outside of Japan and opened representative offices in New York in 1956 and in London in 1958.
Daiwa began pension-trust banking in 1962. It was the first Japanese bank to manage pensions and benefited from the rapid growth of the pension market. The Japanese, without a social security program, had a great propensity to save, and their employers generally maintained conservative pension and insurance practices. During the following decade, the bank opened more overseas offices, in Los Angeles in 1970, Frankfurt in 1971, Hong Kong in 1976, and Singapore in 1979.
However, it was Daiwa 's entry into securities trading in the 1980s that would lead to a scandal with longtime repercussions. Daiwa, like most Japanese banks, made its profits through lending, but failed to implement appropriate oversight procedures when it turned to high-volume securities trading. The Japanese business culture encouraged management to place far more emphasis on trust in subordinates than on oversight. Because books had to be kept in English for offices in the United States, Japanese bankers were even more dependent on employees fluent in English.
In September 1995 the world would learn just how ill-prepared Daiwa was to deal in securities, when officials reported that one of its New York bond traders, Toshihide Iguchi, had embezzled funds and altered bank records in order to conceal 12 years of losses than amounted to $1.1 billion. Iguchi was not only a trader, he was in charge of oversight in his back office duties. What began as an effort in 1984 to conceal a $170,000 loss on the American government-bond and fixed-rates notes market spun out of control, as Iguchi raided accounts belonging to customers to finance further trading in order to recoup his mounting losses. He then forged documents to make it appear that the customer accounts were still intact.
As more facts came out, the bank 's management became more mired in scandal. It was revealed that Iguchi confessed to his conduct in a letter to management in July, yet Daiwa waited nearly ten weeks before reporting the information to U.S. officials, and only then after the urging of their American attorneys, who along with the accountants had been kept in the dark about the problem.
In October 20, 1995, Iguchi pleaded guilty in Manhattan federal court to six counts of fraud, but he also testified that even after he confessed his conduct to Daiwa, he was asked to continue to forge bank records to conceal his losses. Daiwa, despite knowledge to the contrary, told the U.S. Federal Reserve that it still held $600 million in government securities that Iguchi had already sold to conceal his losses. Iguchi also testified that in 1989 and 1992 Daiwa management misled state and federal regulators when it maintained that the bank 's trading operations were moved uptown to keep it separate from the oversight function of record-keepers. Although the traders did change offices, the separation of functions simply did not exist. Unconnected with the Iguchi losses, another impropriety also came to light through court proceedings. Daiwa 's New York office used a corporate shell in the Cayman Islands to absorb some $97 million in losses incurred between 1984 and 1987.
The general manager of Daiwa Bank 's New York office, Masahiro Tsuda, was also indicted and would eventually plead guilty to a single conspiracy count. The bank itself would plead guilty to 16 fraud charges and agree to pay one of the largest fines ever imposed in the United States, $340 million. Daiwa was also expelled from the country. In Japan the bank faced a $1.4 billion suit from shareholders, as well as restrictions placed on it by Japan 's Ministry of Finance.
Daiwa, unlike Barings, was never in danger of collapse. Losses of $1.1 billion represented only eight percent of it capitalization, but its reputation was severely tarnished. Trust customers in particular had to be reassured that their funds were being properly administered. Daiwa closed four overseas offices and returned its focus to retail and trust banking. In September 2000 Daiwa was still enduring the impact of the New York scandal when a Japanese court ruled on the shareholder suit. A number of former and current management officials were ordered to pay $775 million in damages to shareholders for failing to properly oversee Iguchi 's trading. How long the cloud would hang over Daiwa was
A Series of Unfortunate Events and Decisions
Starting Out
Toshihide Iguchi, a Kobe, Japan-born US citizen who majored in psychology at Southwest Missouri State University, Springfield. Upon graduation in 1976, Iguchi joined Daiwa Bank’s New York branch.The branch managed the US Treasury bonds that the bank bought for itself, and on its customers’ behalf. Iguchi did well, rising up the ranks to become the head of the back office. Being the head of the back office, Iguchi had some degree of control on the monitoring of these Treasury bond accounts by the bank and its customers. As he was the last person to sign off on the reports on the accounts, he had the power to edit them without anyone else finding out. This authority that was granted to Iguchi was severely misused by him in the later part of his career. Without it, this scandal could not have even taken place.

Promotion
In 1980, Iguchi was promoted to become a securities trader. This was just added on to his list of responsibilities, as the bank did not make him relinquish his back office role. Hence, while he was trading, he was still supervising the back office that had a duty to keep a watchful eye over traders such as himself.
He did quite well in his first few years, building up a reputation as an astute trader, making significant profits for the bank. In the second half of the 1982, he even made about $50,000 in profits for the bank on instruments that yielded a particularly low margin.
First Loss
At the start of 1983, this “star” trader suffered a huge loss on a single trade on the floating-rate note (“FRN”) market. FRNs were preferred by the bank at the point of time, and were not known to especially volatile. Hence, a loss of Iguchi’s magnitude was quite unexpected.
In this particular incident, Iguchi purchased $10 million in a new issuance in the preliminary offering stage. The prices were expected to pick up when the bonds started trading on the open market. However, demand for the new bonds turned out to be very weak, and the traders were cutting their prices quickly in order to place their bonds. Iguchi initially intended to sell his entire holdings on the same day, sitting on $50,000 of unrealized losses made him think twice about that.
Traders were supposed to submit a report of activities by the contract date. However, since the settlement date was 10 days away and the contract date was settled over the phone, Iguchi decided to postpone his report as no one will notice that it was late as long as it was submitted before settlement. With this 10 days that he bought himself, he hoped for the demand to pick up and for his losses to be reduced. Luck was not in his favor, and by the settlement date, he found himself sitting on $70,000 of losses instead.
Hiding the Losses
As he had lost half a year’s worth of profits that he had made and on top of that, tried to conceal it for over a week, he felt that all the recognition that he was starting to get for his past good performance would slip away from him in an instant if he admits that the losses had been made. Therefore, he decided to ensure that no one will find out about it till he is able to make the money back.
He managed to hide the losses as he was in charge of settling all bond transactions, making chits and recording settlements due to his position in the back office. He felt that it would be easy to postpone the losses for at least a year, and in that time, make the money back with another transaction. He hid the losses through a series of simple steps:
1) He sold off the bonds in the accounts that they were managing to pay for his losses
2) Falsified the account statements so that there would be no indication that they had been sold
Attempt to Get Back into the Black
He knew that the only way he could ever completely rid himself of the mess that the $70,000 loss made was to make enough profits to offset it. He also knew that it would be impossible for him to do it quickly trading the securities that he was authorized to trade due to their low margins. Hence, he decided to go for something much riskier, in the hope of quick and higher returns. 30-year US Treasurys were known to move by several points a day, and even though he was not allowed to trade them, he decided to take the risk and went ahead with it.
He ordered $10 million in the 30-year Treasurys at 98.75, and by the afternoon, it took a dive to 97.75. This added on another $100,000 to his original losses. As the market conditions looked as though it was still going south, Iguchi decided to follow the advice of the salesman and cut his losses at $100,000. As he still clung on to the hope that he could somehow find a way to make it back into the black, he continued to use his method to conceal the losses, using the method mentioned earlier.
Complications arose when the owners of the Treasurys that Iguchi had already sold, sold off their securities or needed interest to be paid on their long-gone bonds. Iguchi had to settle their accounts by selling off more securities and falsifying even more records. As he did not have the luxury to wait till the market conditions were right to sell the Treasurys, he continued to make increasingly huge losses in order to keep the charade going.
Thoughts of Confession
By January 1988, Iguchi had managed to accumulate $200 million in losses. This was taking an immense toll on him mentally, and he was considering confessing to what he has done. He eventually managed to pen down a confession, but he could not muster enough courage to submit it. Unfortunately, the Director that the confession was addressed to and who he intended to tell died in February, and with him, went Iguchi’s determination to confess for many years to come.
Investigations Begun
In the summer of 1989, an unidentified broker tipped the bank and the authorities off about the huge Treasury transactions that Iguchi and his team were making. By then, the losses have mounted to $600 million. Daiwa Bank sent their own auditors to investigate, and left quickly in 20 minutes after merely questioning him and his team.
In 1992, the Federal Reserve Bank of New York sent an examiner down to do an investigation, and he too found nothing amiss. Iguchi claims that this was because the man only stayed for 15 minutes when it was supposed to be an intense investigation over 2 days, and also, he appeared to be drunk.
When Daiwa reported to the Fed in 1993 that there was a cover-up in the bank (unrelated to Iguchi’s unauthorized activities), the Fed conducted a special 4 week investigation that yet again, found nothing out of the ordinary. The surprising thing was that they sent the same man who messed up the investigation in 1992 to head the new investigation.
There was another inspection by the Fed in 1993, this time, a routine one. However, they focused on conflicts between transactions carried out for Daiwa’s clients and for themselves instead of the dangerous overlap in functions. Also, the examiner for the trading division was a college student who had no knowledge about bond dealing. She could not identify the red flags that were waving, and ended the investigation quickly.
Although the Japanese Ministry of Finance had scheduled a scrutiny of the accounts that Iguchi handled and the bond trading division in 1994, the actual investigation did not materialize. The government officials did not even step foot into the office, and used the time instead to go to Vegas and enjoy themselves. With that, they did not notice the $900 million worth of losses the Iguchi had accumulated by then.
With the obvious lack of importance that the various authorities and management placed on doing a proper investigation, Iguchi realized that it would be a long time before anyone would come close to finding out what he have been concealing over the years.

The Confession, Cover-ups, and Conclusion
As mentioned earlier, Iguchi realised that this party would continue for a long time to come. He finally decided to end it once and for all, and sent out his 40-page confession. Instead of reporting the matter immediately to the Fed as legally required, Daiwa, instead, chose to try and shift the losses off shore in an attempt to pretend this whole thing never occurred. The bank had enough assets to cover the $1.1 billion in losses that Iguchi had made over the past 12 years. This was the bank’s undoing, as when the Fed found out that they were willfully trying to hide it from them, the authorities came down hard on them and cast them out totally from the US market.
Risks involved in Daiwa Bank Scandal
Interest Rate Risk
Interest rate risk is the risk incurred by a financial institution when the maturities of its assets and liabilities are mismatched. Because of a position in an interest rate sensitive portfolio, the financial institution is exposed to the risk involved with fluctuations of interest rates. There are many methods to measure this risk and one of them is the duration gap model. The following equation calculates the change to equity given the duration and change in interest rates:

To achieve minimal or no interest rate risk, the factors DAA should be equals to DLL. In this case, Iguchi was trying to make a bet on the treasury bonds after making a loss in the floating rate notes position. As such, he was long in 30 year treasury bonds. Any increase in yield leads to a decrease in price which will cause Iguchi to make a loss. An interest rate move in the other direction will be beneficial for Iguchi’s portfolio.
In 1983, the yield of 30 year treasury bonds in the US is 10.63%. To calculate the coupon rate and duration, the yield of 11% is used and semi-annual coupon payments is assumed. Through this, the coupon rate can be calculated. Furthermore, by observing the yield curve on the month of purchase, the yield curve was constructed. The yields from the yield curve are used to calculate the present value of each coupon payment and also the face value. By doing this, the duration can be calculated and it is 9.82.
DEAR Calculation of T-Bond position
Iguchi bought $10 million worth of 30 year treasury bonds at the price of 98.75 and sold it at the end of the day at 97.75, yielding a loss of $100,000. With all these information, the DEAR of the position can be calculated through this formula:
DEAR = Market value of Position * (MD) * Critical value * S.D. of interest rates
95% DEAR = $10M * (9.82/1.1063) * 1.65 * 0.103% = $151,599
As observed here, there is a 95% probability that the loss is lesser than $151,599. In that trading day, Iguchi lost $100,000. To find the probability of that happening, the same formula is used to find the critical value. The critical value corresponds to a 14.1% chance of him losing $100,000 or more in a trading day. Although the probability is small, it is not a remote tail event and the loss could have been foreseen. At that time, Iguchi was not authorized to trade in treasuries and his unfamiliarity with the asset and the risks involved could have contributed to this loss.

Historical Simulation of T-Bond position
To check the accuracy of the DEAR methodology, a historical simulation method was also performed to look into the risks that Iguchi faced in his $10m position in 30 year treasury bonds. Historical simulation is performed with the last 501 data points, meaning that 501 trading days of interest rate yields were included. 500 probable changes in interest rate were calculated by differencing the interest rate in 2 consecutive dates.
With this, we can make the observation for 500 possible changes in the bond position assuming that interest rates follow historical patterns. By ordering them and taking the 25th result, the potential loss at 95% confidence interval is $159,805. The probability of losing equals or more than $100,000 is 11.4%. From this, we can see that there is a slightly lower chance of him losing $100,000 but it still is not a tail end event.
Actual Bond Yields

From the actual yield curve observed, we can see that from 1983 or 1984 onwards, there is a trend of decreasing bond yields. If Iguchi had held on to the Treasury bond, he would have recovered his losses and made profits instead. Iguchi had picked a day in which the interest rates moved adversely to him and had to liquidate it because he was not authorized to trade treasury bonds. As a result, he would have to continue to cover up more losses in the years to come.
Operational Risk
One of the risks involved in the scandal was operational risk. Toshihide Iguchi committed employee fraud which is a type of operational risk that negatively affects the reputation of a financial institution. Following Iguchi’s huge losses made during his trading activities, he took advantage of his position as head of the branch’s securities to cover up the losses totalling $1.1 billion by selling off securities owned by Daiwa and its pension fund customers. In total, Iguchi conducted unauthorized selling of $377 million of Daiwa Bank’s pension fund customers’ securities and $733 million of their own investment securities. In order to hide the records of the unsanctioned selling, Iguchi used his power as a supervisor in the back office to forge approximately 30,000 trading slips to conceal the sale of the treasury bonds, since he was keeping track of what was happening in this account through transaction reports that flowed through him.
The impact of this fraud and covering up directly resulted in Daiwa Bank facing a 24-count indictment against the bank and its officers. After the Federal Reserve Board discovered that the bank and its officers had attempted to conceal their losses illegally, they ordered Daiwa Bank, one of Japan’s largest commercial banks to cease their operations in the U.S financial markets. Ultimately, this led to a huge amount of public humiliation since the news was published and broadcasted worldwide. Thus, Daiwa Bank took a massive hit to its reputation because of this operational risk.
Liquidity Risk
Liquidity risk arises when a financial institution’s liability holders demand immediate cash for the financial claims that they hold with the FI. In fact throughout the entire scandal, Daiwa Bank faced a substantial amount of liquidity risk due to Iguchi’s unauthorized selling of the bank’s securities. The New York branch of Daiwa Bank that Iguchi was working at held custody of the U.S treasury bonds that the bank had bought on behalf of its customers, through a sub-custody account held at Banker’s Trust. Via this account, interest on the bonds was collected and distributed, and bonds were then transferred or sold according to the wishes of either the bank’s pension fund customers or the bank’s own managers. However, Iguchi continuously sold off the bonds in these sub-custody accounts to pay off all his trading losses. When the time finally came, Daiwa Bank’s customers wanted to sell off their securities or be paid interest on securities that were sold by Iguchi long ago.
To ensure that the customers’ accounts were settled, Iguchi had no other choice but to sell even more securities to meet this cash demand. Because Iguchi had to obtain the cash almost immediately to pay the customers, he tried to sell off treasury bonds as soon as he could. Such assets generate a lower price when the sale is immediate than when Daiwa Bank had more time to negotiate the terms of the sale. Thus, the liquidation of assets at low prices damaged Daiwa Bank’s profitability even further because they were unable to get the highest potential amount of cash they could receive from the sold assets.
Regulatory Risk
Daiwa bank was rather sizable and runs its operations in many international offices. As such, they carried the risk that a change in laws and regulations towards the bank would materially impact their business. On top of that, Daiwa Bank was running massive regulatory risk by not complying with the regulations set by the Federal Reserve Board and misleading bank examiners when they visited the office. The following are some actions that Daiwa Bank carried out during the scandal which caused the regulatory body to act on them:
1. Between 1986 and 1993, the bank operated an unauthorised trading area for securities and concealed it from regulators when they came to check. The bank went to the extent of disguising the trading room as a storage room during regulatory examinations. This was subsequently found out following subsequent investigations after Iguchi’s confession.
2. Following a regulatory rebuff in 1993, Daiwa Bank’s New York branch had been warned by regulators that they had to separate their back-end functions with the traders. Despite this, they still continued to function without a clear division of responsibilities and Iguchi was still head of the security custody department even though he was a trader himself.
3. During the 1995 investigation, Iguchi confessed that between 1984 and 1987, more Daiwa traders other than him suffered huge losses and these losses had also apparently been concealed from regulators by shifting the losses to Daiwa’s overseas affiliates.
4. After Iguchi confessed to his superiors, the senior bank officers kept everything secret until September 18, 1995 when they finally reported to the Federal Reserve Board of the losses, despite a legal requirement to report misdoings immediately to the U.S regulators.
In the aftermath, because of this scandal Daiwa Bank was forced to leave the U.S markets. On top of that, Japan’s ministry of finance was also upset at how Daiwa Bank handled the entire issue and imposed many restrictions on the bank’s activities for a year. Therefore, because of all these changes in regulations directed toward Daiwa Bank, their business model was changed dramatically due to the regulatory risk that they faced. As a result, they shut down most of its international offices as they had already tarnished their international reputation, and was forced to concentrate on its role as a super-regional bank in Southeast Asia.
Problems That Led to the Scandal
There were mainly three problems in Daiwa Bank that led to the scandal, which resulted in a loss of $1.1 billion dollars. The problems are (i) unauthorized trading activities by Iguchi, (ii) a breach of trust by Daiwa officials in deceiving the Fed, and (iii) dual supervisory roles by the Fed and Ministry of Finance .
1. The first problem is due to unauthorized trading activities, which was possible because Iguchi did not relinquish his back-office duties when he was promoted to a trader.
We feel that operations, risk management, and compliance reporting lines should be separate from the business line. This can be done by having a complete segregation of duties from the front and back office. In this way, traders would not have access and control over back-office checks and record keeping, which may tempt them to commit fraud. Also, we suggest special vetting for staff that moves from back-office functions to become traders, which was the case for Iguchi. This would include constant reviews of their trades and work activity.
2. The second problem was the breach of trust by Daiwa officials involving long-term conscious effort by senior managers to deceive regulators on losses stemming from trading activities.
We feel that senior management and boards must encourage a culture of compliance and responsible risk-taking, as this would instill strong corporate governance in the financial institution. If those with authority and power do not walk the talk, then it would be highly unlikely that their subordinates will follow suit. A lax and shoddy culture would increase the probability of the bank’s employees from committing fraud. Also, incentive systems should not encourage excessive risk taking. Clearly, when an employee’s job depends on his performance, it would cause him to take whatever the risk to ensure he keeps his job and bonuses.
3. The last problem was that Daiwa’s New York branch was being supervised by both the Fed in the US, as well as the MOF in Japan. This shared responsibility of the US and home-country bank supervisors resulted in problems falling between the cracks, including effectively eluding regulators.
One example of problems falling between cracks was when the Federal Reserve Bank of New York assigned the inquiry into the equity trading division to a part-time examiner who was a college student in her 20s. She had almost no knowledge of bond dealing, and only spent 20mins conducting the audit investigation, without questioning Iguchi on the dubious records that were blatantly available. Iguchi claimed that all along, anyone could have seen what was going on just by checking the balance in the securities account they used at Bankers Trust. Obviously, the auditors were not doing their job properly, as they assumed that the other party would be doing similar checks as well. As such, it is crucial for dual reporting lines to be clear, so that there is unambiguous accountability on both sides. This will allow better detection of fraud activities.
Lessons Learnt
Having discussed the problems faced by Daiwa Bank, we shall now cover a few takeaways from this Daiwa Bank scandal case, which financial institutions should take note of should they wish to prevent fraud from occurring. These lessons are (i) vacations are a good thing, (ii) successful traders may require more scrutiny, (iii) fraud can continue in an environment of lax controls, and (iv) ethics and principles are crucial in the financial sector.
1. Vacations are a good thing.
Iguchi never took any long vacations during the eleven-year period of his unauthorized trading. It was not that he didn’t want to; he simply could not afford to, as he was so busy covering up his losses and forging trading slips. Hence, employees that do not take long periods of leave should raise suspicion in the workplace.
2. Successful traders may require more, not less, scrutiny.
Supervisors turning a blind eye to employees who consistently produce huge profits may lead to a costly lesson. This was prevalent in this case, where Iguchi was consistently achieving profits for the bank, albeit in an illegal manner.
3. Massive fraud can continue for many years in an environment of lax controls.
This highlights the importance of regulations, as Iguchi made his confession not because he feared he was about to be caught, but instead when he realised that the situation might otherwise carry on indefinitely. Had he decided to wait on even longer, the losses might have even escalated beyond the $1.1 billion loss mark.
4. Ethics and principles are important in this sector.
As cliché as this may be, if Iguchi had reported his initial losses of $70000 right at the start, this would not have escalated to the $1.1 billion of today. As future bankers or employees in the financial sector, we must remember not to let greed cloud our judgement of what is right or wrong.
After the scandal, Daiwa Bank had $200 billion of assets and $8 billion of reserves, which meant that it was big enough to survive the hit. However, punishment and public humiliation that came with it dealt a massive blow to Daiwa’s reputation. As a result, Daiwa had to forgo its international ambitions and concentrate its core businesses in Japan and Southeast Asia. This is a prime example of how concentrating on its balance sheet performance may not be enough to guarantee a bank’s survival.

Bibliography
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Wallace, W. (2005). Public Sector Corruption: Lessons from Daiwa, Sumitomo, and Bank of Estonia. Journal of Public Budgeting, Accounting & Financial Management , 17 (3), 365-397.
Mbuya, J. C. (2005). The Rise and Fall of Saambou Bank. Retrieved March 10, 2013, from Google Books: http://books.google.com.sg/books?id=tU7ck6vOWFAC&pg=PA111&lpg=PA111&dq=%22In+Iguchi’s+confessional+letters+to+Daiwa+in+mid-summer+1999+(he+sent+a+stream+of+letters+and+notes+to+the+bank+after+that+initial+July+13+letter)+the+rogue+custody+officer+suggested+that+his+superiors+keep+the+losses+secret+until+“appropriate+measure&source=bl&ots=wSd6EVr03o&sig=BlreMFkTGDpfNnSJgDc8WkMXqAE&hl=en&sa=X&ei=r9ByUc2wDo3krAeOtYHYAw&ved=0CDAQ6AEwAA#v=onepage&q=%22In%20Iguchi’s%20confessional%20letters%20to%20Daiwa%20in%20mid-summer%201999%20(he%20sent%20a%20stream%20of%20letters%20and%20notes%20to%20the%20bank%20after%20that%20initial%20July%2013%20letter)%20the%20rogue%20custody%20officer%20suggested%20that%20his%20superiors%20keep%20the%20losses%20secret%20until%20“appropriate%20measure&f=false
Reserve, F. (2011, April 13). Selected Interest Rates (Daily) - H. 15. Retrieved March 10, 2013, from Federal Reserve Government: www.federalreserve.gov/releases/h15/data.htm

Bibliography: Becker, B., & Nicolas, S. (2008, March). Rogue Traders: Lies, Losses, and Lessons Learned. Retrieved March 10, 2013, from WilmerHale: http://www.wilmerhale.com/uploadedFiles/WilmerHale_Shared_Content/Files/Editorial/Publication/Rogue%20Trader%20Article%20FINAL%20for%20Alert.pdf Wallace, W. (2005). Public Sector Corruption: Lessons from Daiwa, Sumitomo, and Bank of Estonia. Journal of Public Budgeting, Accounting & Financial Management , 17 (3), 365-397. Mbuya, J. C. (2005). The Rise and Fall of Saambou Bank. Retrieved March 10, 2013, from Google Books: http://books.google.com.sg/books?id=tU7ck6vOWFAC&pg=PA111&lpg=PA111&dq=%22In+Iguchi’s+confessional+letters+to+Daiwa+in+mid-summer+1999+(he+sent+a+stream+of+letters+and+notes+to+the+bank+after+that+initial+July+13+letter)+the+rogue+custody+officer+suggested+that+his+superiors+keep+the+losses+secret+until+“appropriate+measure&source=bl&ots=wSd6EVr03o&sig=BlreMFkTGDpfNnSJgDc8WkMXqAE&hl=en&sa=X&ei=r9ByUc2wDo3krAeOtYHYAw&ved=0CDAQ6AEwAA#v=onepage&q=%22In%20Iguchi’s%20confessional%20letters%20to%20Daiwa%20in%20mid-summer%201999%20(he%20sent%20a%20stream%20of%20letters%20and%20notes%20to%20the%20bank%20after%20that%20initial%20July%2013%20letter)%20the%20rogue%20custody%20officer%20suggested%20that%20his%20superiors%20keep%20the%20losses%20secret%20until%20“appropriate%20measure&f=false Reserve, F. (2011, April 13). Selected Interest Rates (Daily) - H. 15. Retrieved March 10, 2013, from Federal Reserve Government: www.federalreserve.gov/releases/h15/data.htm