Sign up to create alerts for Instruments,
Economic Events and content by followed authors
Free Sign Up Already have an account? Sign In
Quotes
All Instrument Types
- All Instrument Types
- Indices
- Equities
- ETFs
- Funds
- Commodities
- Currencies
- Crypto
- Bonds
- Certificates
Please try another search
Free Webinar - Decode the market's secrets! | Tuesday, May 30, 2023 | 01:00PM EDT Enroll Now
Japanese banks have sufficient buffers to counter risks -BOJ
Published Mar 14, 2023 03:50AM ET
Updated Mar 14, 2023 04:41AM ET
© Reuters. FILE PHOTO: A man walks past the headquarters of Bank of Japan in Tokyo, Japan, January 17, 2023. REUTERS/Issei Kato
By Leika Kihara
TOKYO (Reuters) -Japanese financial institutions have sufficient capital buffers to absorb losses caused by various external factors, including risks caused by the collapse of U.S. lender Silicon Valley Bank, the Bank of Japan (BOJ) said on Tuesday.
They have continued to channel funds to borrowers smoothly even under various stress factors such as supply constraints and rising overseas interest rates, the BOJ said in an annual report that detailed the results of on-site examinations of financial institutions.
"Japanese financial institutions' direct exposure to Silicon Valley Bank is small, and thus the impact is likely limited," a BOJ official told reporters in a briefing on the report.
The collapses of Silicon Valley Bank and Signature Bank (NASDAQ:SBNY) have stoked concern about contagion, sending shares of financial stocks - including those in Japan - tumbling.
In its report, the BOJ said many Japanese regional banks face challenges in risk management such as analysing impacts on their portfolios in times of heightened market volatility.
"Some regional financial institutions have suffered a substantial increase in valuation losses" and failed to adequately assess their risk tolerance against profits, it said.
It noted that Japanese financial institutions have actively taken on market risk in recent years amid ultra-low interest rates, though they have become "somewhat cautious" on their investments in light of rising global interest rates.
Some regional financial institutions have also not sufficiently ascertained how declining interest payments could affect their future earnings, the BOJ said.
"Thus, many regional financial institutions were found to have issues in terms of conducting effective risk management," the report said.
Related Articles
Add Chart to Comment
Confirm Block
Are you sure you want to block %USER_NAME%?
By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.
%USER_NAME% was successfully added to your Block List
Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.
Report this comment
I feel that this comment is:
Comment flagged
Thank You!
Your report has been sent to our moderators for review
Add a Comment
We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
Enrich the conversation, don’t trash it.
Stay focused and on track. Only post material that’s relevant to the topic being discussed.
Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.