ID :
52308
Thu, 03/26/2009 - 04:21
Auther :
Shortlink :
https://oananews.org//node/52308
The shortlink copeid
BOJ deputy rejects idea of immediate readoption of zero-rate policy+
OTARU, Japan, March 25 Kyodo - Bank of Japan Deputy Governor Hirohide Yamaguchi suggested Wednesday that the central bank is not ready to immediately reintroduce a zero-interest rate policy to boost the economy, underlining the possible negative impact from the
unconventional monetary policy.
''We will not reject (the policy) totally'' amid the global economic recession,
Yamaguchi told reporters in Otaru, Hokkaido. But he also said the bank's key
interest rate, currently at 0.1 percent, is already extremely low.
It is uncertain what positive outcome the bank could bring about by lowering
borrowing costs further, he said, adding that such a move could have
''demerits'' like ''harming smooth (money market) trading between financial
institutions.''
The BOJ last kept the rate at near zero percent to fight deflationary pressures
in the country under its unconventional credit-easing policy between 2001 and
2006.
At a meeting with local business leaders in Otaru earlier in the day, Yamaguchi
said Japanese banks are increasingly feeling that their capital bases are being
squeezed and could further cut their lending to businesses and cause downside
risks to the country's economic growth.
Banks and other financial institutions, which are facing growing credit risks
and losses on their stock investments amid the global financial turmoil, ''have
become aware of limits to their capital when they consider lending,'' the
deputy governor said.
The BOJ has taken a series of emergency measures to improve the financial
strength of banks, including outright purchases of corporate debt and shares
held by them. The central bank said last week it is also planning to provide
major banks with up to 1 trillion yen in subordinated loans.
Banks can count subordinated debts as part of their capital because these
instruments are given a lower repayment priority than other forms of debt in
exchange for higher borrowing rates.
Yamaguchi said the BOJ hopes to implement the fresh scheme ''as soon as
possible.''
The nation's financial institutions had been viewed as relatively unaffected by
the credit crisis compared with those in Europe and the United States, given
their limited exposure to subprime and other risky loans, Yamaguchi added.
But he also said the BOJ is closely watching ''whether the management vitality
of those institutions could weaken and lead them to reduce lending.''
==Kyodo
2009-03-25 23:50:26
unconventional monetary policy.
''We will not reject (the policy) totally'' amid the global economic recession,
Yamaguchi told reporters in Otaru, Hokkaido. But he also said the bank's key
interest rate, currently at 0.1 percent, is already extremely low.
It is uncertain what positive outcome the bank could bring about by lowering
borrowing costs further, he said, adding that such a move could have
''demerits'' like ''harming smooth (money market) trading between financial
institutions.''
The BOJ last kept the rate at near zero percent to fight deflationary pressures
in the country under its unconventional credit-easing policy between 2001 and
2006.
At a meeting with local business leaders in Otaru earlier in the day, Yamaguchi
said Japanese banks are increasingly feeling that their capital bases are being
squeezed and could further cut their lending to businesses and cause downside
risks to the country's economic growth.
Banks and other financial institutions, which are facing growing credit risks
and losses on their stock investments amid the global financial turmoil, ''have
become aware of limits to their capital when they consider lending,'' the
deputy governor said.
The BOJ has taken a series of emergency measures to improve the financial
strength of banks, including outright purchases of corporate debt and shares
held by them. The central bank said last week it is also planning to provide
major banks with up to 1 trillion yen in subordinated loans.
Banks can count subordinated debts as part of their capital because these
instruments are given a lower repayment priority than other forms of debt in
exchange for higher borrowing rates.
Yamaguchi said the BOJ hopes to implement the fresh scheme ''as soon as
possible.''
The nation's financial institutions had been viewed as relatively unaffected by
the credit crisis compared with those in Europe and the United States, given
their limited exposure to subprime and other risky loans, Yamaguchi added.
But he also said the BOJ is closely watching ''whether the management vitality
of those institutions could weaken and lead them to reduce lending.''
==Kyodo
2009-03-25 23:50:26
