Japan switches to centralised stress tests on 5 banks: Nikkei

[TOKYO] Japan's government and central bank will conduct joint stress tests on MUFG Bank, Sumitomo Mitsui Banking Corp, Mizuho Bank, Sumitomo Mitsui Trust Holdings and Norinchukin Bank, Nikkei reported.

The tests will gauge the banks ability to absorb economic shocks as expansion abroad leaves them more vulnerable to external risks.

Previously, Japan left the details of stress tests to individual banks.

Last week, the Bank of Japan warned the country's banking system is becoming increasingly fragile as financial institutions boost risky lending and investment in an environment of prolonged ultra-low interest rates.

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