Bank of Japan

Payments & Settlements

About Half of Global FX Market Exposed to Settlement Risk

By Margaret Law | 15/10/2020

Without immediate action, FX settlement risk will continue to accumulate and introduce vulnerabilities into the global financial system, says Margaret Law at CLS.

CBDCs

BOJ to Commence CBDC Testing as Early as April 2021

By Editors | 12/10/2020

A proof of concept will take place over two phases, followed by a possible pilot programme involving private payment service providers and end-users.

CBDCs

BIS Report Outlines Common Foundation for Retail CBDCs

By Editors | 11/10/2020

Any decision to launch a CBDC would depend on an informed judgment that the risks can be managed, including the risk of disintermediating banks or enabling ‘digital runs’.

Capital Adequacy

Japan: Bank Stress Tests to Use Covid-19 as Baseline Scenario

By Editors | 08/10/2020

The BOJ and FSA jointly stress-tested banks using a common scenario for the first time in December. This year’s stress tests will use the Covid-19 pandemic as the common scenario.

Liquidity Risk

BOJ Has Effectively Paid Banks to Lend to Businesses – Report

By Editors | 18/08/2020

In April, the BOJ started offering banks a 0.1% interest rate if they used a new lending facility to lend to SMEs. Banks have shown record lending in recent months.

Structural Regulation

Japan Proposes Mid-2021 Cut-off on New LIBOR Loans, Bonds

By Manesh Samtani | 10/08/2020

Feedback is sought on fallbacks for cash products referencing JPY LIBOR. Under the plan, issuance of new LIBOR based loans and bonds will cease by mid-2021.

Payments & Settlements

Japanese Trust Funds Align with Global Trends on FX Settlement Risk

By Makoto Miyazaki | 26/07/2020

Trust funds in Japan have started focusing on mitigating FX settlement risk, to which they have long been exposed. This article explains the change in focus and the factors behind this.

Structural Regulation

BOJ, FSA Again Urge FIs to Step Up Preparation for LIBOR Transition

By Editors | 23/07/2020

Financial institutions are urged to continue to take the necessary steps to ensure a smooth transition from LIBOR, even as they allocate resources to support Japanese businesses and households.

Emerging Prudential Risks

Japan FSA Pushes for Sustainability in Bank Business Models

By Editors | 10/07/2020

Management changes may be needed at regional banks that lack sustainability in their business models, says the FSA’s Toshihide Endo.