New Japanese top banker warns of side effects of BOJ easing

April 1, 2018

Tokyo- Koji Fujiwara, new chief of the Japanese Bankers Association, has stressed the need to beef up the monitoring of adverse effects of the Bank of Japan's massive monetary easing, including the negative interest rate policy, on the country's financial system.

In a recent interview, Fujiwara, also president of Mizuho Bank, said: "We are coming to a point where attention should be paid to the side effects of the prolonged BOJ easing. The monitoring level needs to be elevated."

As part of the side effects, he pointed out that the ultraeasy policy has caused a deterioration in financial institutions' earnings and made it difficult for companies and individuals to generate profits from asset management.

Local financial institutions are "in a tougher situation" than large institutions, on the back of slumping local economies, he added.

"We are ready to firmly support (regional banks') moves for realignments and business tie-ups, and structural reforms," Fujiwara said.

Noting that the proportion of cash settlements is still high in Japan, Fujiwara said, "The country has considerable room for going cashless."

"Japanese banks need to work together (to develop new settlement services) toward the 2020 Tokyo Olympic and Paralympic Games," Fujiwara emphasized. Jiji Press