• Reuters

  • SHARE

The Financial Services Agency has begun stress tests on regional banks to determine how much their earnings would suffer if long-term interest rates remain near record lows under the Bank of Japan’s loose money policy, according to two sources with direct knowledge of the process.

The FSA is concerned that with 10-year Japanese government bond yields near a record low around 0.3 percent, regional lenders could see a decline in earnings as the gap between what they pay for deposits and what they collect on loans and bond holdings shrinks, the sources, who asked not to be named, said.

In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.

SUBSCRIBE NOW