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
