Credit Suisse First Boston, a huge Swiss-owned banking group, said it knew of no reason for the move. The company insists that staff outside of Japan were unaware of the financial misdeeds of their subsidiary, Credit Suisse Financial Products (CSFP), in Tokyo.

"The group is unable to reconcile such an unprecedented decision with its understanding of the facts," a spokeswomen said. "At no time did CSFP or the group endorse this isolated behaviour."

At no time did CSFB ensdorse this isolated behaviour

Credit Suisse First Boston

The Japanese have also indicted Shinji Yamada, the former head of CSFP's branch in the Japanese capital, in connection with what they said was an attempted cover-up during an inspection by financial services regulators.

Mr Yamada, who was arrested last month, has been accused with two other unidentified CSFP employees of hiding documents from inspectors of the Financial Supervisory Agency, Japan's new financial regulator, during a search at their offices.

Crackdown

The move was part of crackdown by the FSA, which was set up as part of the reform of Japan's troubled banking sector which has gone deeply into debt.

The Japanese authorities accused CSFP of offering clients inappropriate products, such as risky derivatives contracts that could have helped them conceal huge losses by bouncing them from one account to another.

That in itself may not necessarily be a criminal matter, but the authorities were angered by what they describe as the obstructive attitude of the bank to the investigation. CSFP is said to have made it difficult to obtain documents detailing the transactions.

It was these actions that led to the criminal sanctions, and also persuaded the government to suspend CSFP's banking license in Japan.

Sources close to the bank said the CSFP employees may have "flipped out" or panicked when investigators arrived. At CSFB , executives insist that its Tokyo-based employees had only delayed, not derailed any investigation.

The Japanese government seems determined to make an example of CSFB because of its prominent position in international financial markets. Government officials seem to hope that they can change the perception that Japan has a relatively relaxed regime of financial supervision.

Shares in Credit Suisse closed down 2 Swiss francs at 305 SFr in heavy trading on the Zurich market.