By Takahiko Wada
TOKYO (Reuters) - Japan's banking regulator is surveying regional lenders on how local businesses are coping with new restrictions to contain COVID-19, as it seeks to forestall a spike in bankruptcies, four sources with direct knowledge of the matter told Reuters.
The survey by the Financial Services Agency (FSA) follows the government's roll-out of state-of-emergency measures last month that could destabilise regional economies, the sources said.
While policymakers stress Japan's banking system remains stable as a whole, the move underscores their concern over the prolonged and widening damage the coronavirus pandemic is inflicting on companies and banks.
"Financial institutions must do their utmost to support corporate funding," one of the sources said. "Given the need to help regional economies revitalise after the pandemic, we must prevent a huge increase in bankruptcies."
The sources spoke on condition of anonymity as they were not authorised to speak publicly.
In response to questions from Reuters, the FSA said: "Since March of last year, we have made the efforts of financial institutions to support businesses a top priority in our inspections and supervisions.
"From time to time, depending on the circumstances, financial institutions are asked on an ongoing basis about the status of their support and the status of their customers."
Japan placed 11 of its 47 prefectures under a state of emergency last month, with containment measures centring on shortening business hours at bars and restaurants, and suspending a subsidised-tourism initiative.
The government lifted the emergency state for one of the 11 prefectures starting from Monday. But the capital Tokyo still has curbs in place, which bodes ill for some regional areas reliant on tourists from big cities.