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
Central banks need digital currencies to stay relevant
China’s CICC demotes senior bankers, cuts pay to slash costs
Citi promotes Damien Tan to corporate banking head for Singapore
Australian dollar firm as bulls bet on hawkish turn at RBA
ECB rate cut case getting stronger, says chief economist Lane
RBNZ has limited scope to cut cash rate this year: OECD