The Financial Services Agency plans to integrate its inspection and supervisory policies to strengthen its oversight of banks, insurance firms and other financial institutions, according to informed sources.
The agency will disclose the new policy by September, the sources said Monday.
FSA officials in charge of monitoring financial institutions will serve concurrently in the agency’s Inspection and Supervisory bureaus to improve the quality of monitoring and reduce overlapping work.
The Inspection Bureau conducts on-site investigations of financial institutions while the Supervisory Bureau is in charge of daily monitoring.
The new policy will focus on examining how interest rate risks will affect the country’s overall financial system, as financial institutions hold large amounts of government bonds.
The move comes amid a possible rise in interest rates on the back of the economic recovery.
As part of the effort, the FSA will accept experts from the Bank of Japan. The agency is also considering conducting stress tests on every financial institution.