Japan: Financial Sector Stability Assessment Update

IMF Staff Country Reports, August 1, 2012

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Japan: Financial Sector Stability Assessment Update

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Bibliographic details

• Published: August 1, 2012
• Series: IMF Staff Country Reports
• DOI: https://doi.org/10.5089/9781475506358.002

Summary

• The macroeconomic environment of Japan "has constantly been under pressure owing to rising public debt and fiscal deficits."
• "Credit demand has been limited and has shown weak profitability."
• "Growing risks have heightened concerns about a possible feedback to financial stability."
• This report "summarizes the findings of the financial sector stability assessment of Japan."
• The Executive Board "recommends a broad-based financial reform plan that could contribute to private sector growth."
• Suggested measures included:
  • allocating market-based credit to SMEs,
  • improving the framework for capital markets, and
  • consolidating and streamlining of regional banks.

Key findings and analysis

• Macroeconomic pressures:
  • rising public debt
  • fiscal deficits
• Credit and profitability:
  • limited credit demand
  • weak profitability in credit provision
• Financial stability risk:
  • growing risks that may feedback into financial stability

Policy recommendations

• Broad-based financial reform plan to support private sector growth.
• Specific measures suggested:
  • Allocate market-based credit to SMEs.
  • Improve the framework for capital markets.
  • Consolidate and streamline regional banks.

Subject coverage and keywords

• Subjects: Banking; Capital adequacy requirements; Financial institutions; Financial Sector Assessment Program; Financial sector policy and analysis; Financial stability assessment; Insurance companies; Securities; Stress testing.
• Keywords: balance sheet; banking sector; central bank; CR; credit risk; Financial Sector Assessment Program; Financial stability assessment; financial system; Global; Insurance companies; interest rate; ISCR; Japan FSAP; Securities; Stress testing.

Content in this bundle

• Japan: Financial Sector Stability Assessment Update; IMF Country Report No. 12/210; July 10, 2012
  • Japan: Financial Sector Stability Assessment Update; IMF Country Report No. 12/210; July 10, 2012 (Markdown version)
  • Japan: Financial Sector Stability Assessment Update; IMF Country Report No. 12/210; July 10, 2012 (PDF)