Japanese banks face different kind of stress test
Financial Services Agency checking if ultra-low interest rates are stifling smaller banks' ability to earn
Tokyo
JAPAN's financial regulator is running stress tests to see if too much cash in the system is stifling smaller banks' ability to earn, unlike regulatory tests elsewhere that have been designed to see whether lenders had enough capital to cope with financial shocks.
Two people with direct knowledge of the process said that the Financial Services Agency (FSA) had initiated the tests on concerns that with 10-year Japanese government bond yields near a record low around 0.3 per cent, regional lenders in particular could be at risk as the gap between what they pay for deposits and what they collect on loans and bond holdings shrinks. The FSA was not immediately available for comment.
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Banking & Finance
Weak yen pressures Bank of Japan’s interest rate decision
Basel Committee adds climate risks to banking supervision standards
Crypto firm sues SEC to fend off oversight of Ethereum
Great Eastern chairman appeals for patience as shareholders fume over share price ‘disaster’
S&P Global first-quarter profit beats estimates on strong product demand
Thai banks cut rate for some borrowers after push from PM