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Japan: Financial System Stability Assessment

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  • International Monetary Fund

Abstract

This paper assesses the stability of the financial system in Japan. Although the financial system has remained stable, the low profitability environment is creating new risks, and pressures are likely to persist. The search for yield among banks has led some to expand their overseas activities, and more generally to a growth in real estate lending and foreign securities investments. Efforts to increase risk-based lending to small-and medium-sized enterprises are welcome, but many banks still need to develop commensurate credit assessment capacities. Stress tests suggest that the banking sector remains broadly sound, although market risks are increasing, and there are some vulnerabilities among regional banks.

Suggested Citation

  • International Monetary Fund, 2017. "Japan: Financial System Stability Assessment," IMF Staff Country Reports 2017/244, International Monetary Fund.
    • Handle: RePEc:imf:imfscr:2017/244
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    File URL: http://www.imf.org/external/pubs/cat/longres.aspx?sk=45151
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    References listed on IDEAS

    as
    1. Diebold, Francis X. & Yılmaz, Kamil, 2014. "On the network topology of variance decompositions: Measuring the connectedness of financial firms," Journal of Econometrics, Elsevier, vol. 182(1), pages 119-134.
    2. Marco A. Espinosa‐Vega & Juan Solé, 2011. "Cross‐border financial surveillance: a network perspective," Journal of Financial Economic Policy, Emerald Group Publishing Limited, vol. 3(3), pages 182-205, August.
    3. Claudio Borio & Robert Neil McCauley & Patrick McGuire & Vladyslav Sushko, 2016. "Covered interest parity lost: understanding the cross-currency basis," BIS Quarterly Review, Bank for International Settlements, September.
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    Cited by:

    1. Claudia Gabriela BAICU & Luise MLADEN & Diana CRĂCIUNAȘ, 2017. "Considerations regarding ageing impact on banking system – challenges, strategies," International Conference on Economic Sciences and Business Administration, Spiru Haret University, vol. 4(1), pages 42-48, October.
    2. Grund, Sebastian & Nomm, Nele & Walch, Florian, 2020. "Liquidity in resolution: comparing frameworks for liquidity provision across jurisdictions," Occasional Paper Series 251, European Central Bank.
    3. Calice, Pietro & Leonida, Leone & Muzzupappa, Eleonora, 2021. "Concentration-stability vs concentration-fragility. New cross-country evidence," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 74(C).
    4. Natasha Kalara & Lu Zhang, 2018. "The changing landscape of firm financing in Europe, the United States and Japan," CPB Discussion Paper 383, CPB Netherlands Bureau for Economic Policy Analysis.
    5. Matěj Maivald & Petr Teplý, 2020. "The impact of low interest rates on banks' non-performing loans," FFA Working Papers 2.002, Prague University of Economics and Business, revised 25 Feb 2020.
    6. Charlotte M. Karam & Fida Afiouni, 2021. "Career constructions and a feminist standpoint on the meaning of context," Gender, Work and Organization, Wiley Blackwell, vol. 28(2), pages 672-700, March.

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