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22 Apr 2016
BOJ Report: Negative rates will likely weigh on financial institutions' profits for the time being
The Bank of Japan’s (BOJ) financial system report released this Friday, revealed that the central bank’s QQE with negative interest rates is having the intended effects on the financial system, although might weigh on financial institutions' profits.
Key points from the report:
BOJ’s negative rate policy will likely weigh on financial institutions' profits for the time being
Japanese financial institutions have the strength to continue taking on risks even as BOJ’s negative rate policy weighs on their profits
QQE with negative rates has helped smooth functioning of financial system by lowering deposit, loan rates
Heightened volatility in global markets has led to stock price declines, Yen rises that worked to restrain risk taking somewhat
Signs of holdup in flow of funds have been observed, including some indicators pointing to reduced market liquidity in money markets, JGB market
Key points from the report:
BOJ’s negative rate policy will likely weigh on financial institutions' profits for the time being
Japanese financial institutions have the strength to continue taking on risks even as BOJ’s negative rate policy weighs on their profits
QQE with negative rates has helped smooth functioning of financial system by lowering deposit, loan rates
Heightened volatility in global markets has led to stock price declines, Yen rises that worked to restrain risk taking somewhat
Signs of holdup in flow of funds have been observed, including some indicators pointing to reduced market liquidity in money markets, JGB market