Additional interest rate of 0.1% from Japan Bank to reorganize regional banks

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The system announced by the Bank of Japan to grant an additional 0.1% interest to the Bank of Japan current account held by local banks and credit unions is in line with Prime Minister Yoshii Kan, who has as aim to reorganize regional banks in the future. There is a view. There was a voice from the government to evaluate it.

At a press conference on the morning of the 11th, Secretary of State Katsunobu Kato told the regional banks: “I hope you will push through your own administrative reforms, strengthen your administrative base and contribute to the region.” “We believe that the measures promote the strengthening of the administrative base of local banks.”

The system requires the strengthening of the management base, such as business integration, and will be implemented as a three-year measure for a limited time until 2022. The objective is to ensure the stability of the financial system by supporting regional financial institutions that have worked to strengthen its management base while supporting the regional economy.

Regional financial institutions have been one of Prime Minister Kan’s important policies from the beginning. In the presidential elections in September, he said there were “too many to come” for local banks. After taking office, he instructed Taro Aso, Minister of Finance and Finance, to improve the environment, including promoting reorganization, in order to strengthen the management base of regional banks.

Former member of the Bank of Japan’s deliberative committee, Noboru Kiuchi, executive economist at Nomura Research Institute, analyzed in a report that the actions taken by the Bank of Japan “indicated an intention to support business integration, etc., and they are a considerable advance. ” “It may include the consideration of Prime Minister Kan, who is talking about the reorganization of regional financial institutions,” he said.

Encourage first efforts

While the outlook for the domestic and foreign economies is highly uncertain due to the influence of the new corona virus, the Japanese bank’s sense of caution regarding the stability of the financial system is also behind the introduction.

The financial system report released by the Bank of Japan on October 22 showed that if the real economy stagnates due to the impact of the new krone, domestic lending will start to decline in fiscal 2010. Governor Tohiko Kuroda said in a statement. conference on day 4, “It is also necessary to take into account that if the economy deteriorates more than expected, it can affect the financial system.”

The government and the Bank of Japan have strengthened cooperation by supporting virtually interest-free and unsecured government loans on favorable terms where the Bank of Japan gives 0.1% interest to the financial institutions used. However, the interest offer for virtually interest-free and unsecured loans will end in three years.

Hirohide Takaguchi, director of the Office of Financial Organization, explained on the 10th that the additional interest rate was set as a three-year time limit “to encourage initial efforts by regional financial institutions.” Regarding cooperation with the government, “the Bank of Japan and the government recognize that it is important for regional financial institutions to strengthen their management base in order to be able to smoothly exercise their role as financial intermediaries.” Saying.

Yoshimasa Maruyama, chief market economist at SMBC Nikko Securities, said in a report that “it appears to be in the area of ​​government and financial policy” and that “doubts remain about the perspective of those responsible for the policy to implement.” However, in terms of showing options to regional financial institutions, he believes that “a positive attitude can be positively evaluated.”

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