Japanese banks will oppose a push by global regulators to toughen rules on the capital lenders require to withstand an increase in interest rates, the new chief of the country's bank lobby said.
Stricter capital requirements for interest-rate risk on assets lenders plan to hold to maturity would have a "severe impact" on the nation's banks, Japanese Bankers Association Chairman Yasuhiro Sato said in an interview.
The Basel Committee on Banking Supervision is weighing updating the rules amid concern that some banks may not be prepared for higher rates when central banks end monetary easing. In Japan, such a revision may hamper the practice of lenders using returns from asset investments and loan profits to pay interest to depositors, according to Sato.