BOJ's Suzuki says benefits of monetary easing exceeding costs for now
Bank of Japan monetary policy board member Suzuki
- must be mindful demerits of prolonged, low-interest rate environment
are accumulating, could affect Japan's financial system stability
- massive low-rate loans offered to
pandemic-hit firms could push down financial institutions' margin for
longer period of time
- part of banks' increasing loans to
pandemic-hit firms could sour, push up banks' credit costs
- if second, third wave of infections
emerges, Japan commercial banks' credit costs could balloon to levels
hit during Lehman crisis
- effect of monetary easing could be
curtailed if firms pile up savings instead of using profits to boost
wages, capex
- BOJ's monetary policy framework is
functioning, benefits of monetary easing exceeding costs for now
- Jpan's financial institutions have
strong buffers, but problem is what could happen ahead
- if impact of pandemic is bigger than
expected, worsening economy could hurt financial system which then
weighs further on growth
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