{
  "title": "Japan: Financial Sector Assessment Program-Financial System Stability Assessment",
  "publication": "IMF Staff Country Reports, May 13, 2024",
  "sourceUrl": "https://www.imf.org/en/publications/cr/issues/2024/05/10/japan-financial-sector-assessment-program-financial-system-stability-assessment-548785",
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  "summary": "This paper presents Financial System Stability Assessment of Japan Financial Sector Assessment Program. Japan’s large and globally well-integrated financial system has remained resilient through a series of shocks, including the coronavirus disease 2019 pandemic, aided by strong policy support and i",
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    {
      "heading": "Overview",
      "content": "- This paper presents Financial System Stability Assessment of Japan Financial Sector Assessment Program.\n- Japan’s large and globally well-integrated financial system has remained resilient through a series of shocks, including the coronavirus disease 2019 pandemic, aided by strong policy support and improved policy frameworks.\n- The evolving and challenging risk environment underscores the need to fill remaining gaps in the financial sector policy frameworks."
    },
    {
      "heading": "Key findings",
      "content": "- The financial system is broadly resilient to a range of adverse macrofinancial shocks, though there are some areas of susceptibility.\n- Banks and insurers are, in aggregate, well able to maintain their solvency position under a hypothetical adverse scenario comprising an increase in foreign and domestic interest rates and a decline in economic growth and asset prices.\n- Staffing resources need to be increased significantly to enhance the supervision and resolution of financial institutions."
    },
    {
      "heading": "Risk assessment and stress-test results",
      "content": "- Hypothetical adverse scenario components:\n  - an increase in foreign and domestic interest rates\n  - a decline in economic growth\n  - a decline in asset prices\n- Aggregate solvency outcome:\n  - Banks and insurers are, in aggregate, well able to maintain their solvency position under the above scenario.\n- Keywords and analytical focus areas: climate transition risk analysis result, core inflation, economic value, stress test result."
    },
    {
      "heading": "Policy recommendations and supervisory actions",
      "content": "- The supervisory agency should continue to develop its risk-based approach to banking supervision.\n- The supervisory agency should be provided with the power to set individual bank capital ratios above the minimum in response to a bank’s risk profile.\n- Increase staffing resources significantly to enhance supervision and resolution of financial institutions.\n- Fill remaining gaps in the financial sector policy frameworks to address evolving risks.\n\n---\n\n Content in this bundle\n\n- 1jpnea2024001\n  - 1jpnea2024001 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - 1jpnea2024001 (PDF){rel=\"external\" type=\"application/pdf\"}"
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    "Published: May 13, 2024",
    "Series: IMF Staff Country Reports",
    "DOI: https://doi.org/10.5089/9798400273384.002",
    "This paper presents Financial System Stability Assessment of Japan Financial Sector Assessment Program.",
    "Japan’s large and globally well-integrated financial system has remained resilient through a series of shocks, including the coronavirus disease 2019 pandemic, aided by strong policy support and improved policy frameworks.",
    "The evolving and challenging risk environment underscores the need to fill remaining gaps in the financial sector policy frameworks.",
    "The financial system is broadly resilient to a range of adverse macrofinancial shocks, though there are some areas of susceptibility.",
    "Banks and insurers are, in aggregate, well able to maintain their solvency position under a hypothetical adverse scenario comprising an increase in foreign and domestic interest rates and a decline in economic growth and asset prices.",
    "Staffing resources need to be increased significantly to enhance the supervision and resolution of financial institutions.",
    "Hypothetical adverse scenario components:",
    "Aggregate solvency outcome:",
    "Keywords and analytical focus areas: climate transition risk analysis result, core inflation, economic value, stress test result.",
    "The supervisory agency should continue to develop its risk-based approach to banking supervision.",
    "The supervisory agency should be provided with the power to set individual bank capital ratios above the minimum in response to a bank’s risk profile.",
    "Increase staffing resources significantly to enhance supervision and resolution of financial institutions.",
    "Fill remaining gaps in the financial sector policy frameworks to address evolving risks.",
    "**1jpnea2024001**"
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