TOKYO, March 16 (Reuters) – The pinnacle of Japan’s banking foyer stated on Thursday that there aren’t any indicators in the meanwhile of the Japanese monetary system being affected by a disaster of confidence in Credit score Suisse (CSGN.S), because the nation’s banks are well-capitalised.
A plunge in shares of Credit score Suisse has renewed fears of a full-blown banking disaster, inflicting a rout in international financial institution shares. Credit score Suisse later introduced it might borrow as much as 50 billion Swiss francs ($54 billion) from the Swiss central financial institution.
“International banks have beefed up their danger controls over capital and liquidity” because the 2008 international monetary disaster, Junichi Hanzawa, chairman of the Japanese Bankers Affiliation, instructed reporters.
“European banks typically have stable capital ratios, and so do Japanese banks,” stated Hanzawa, additionally the chief government of MUFG Financial institution (8306.T).
He additionally stated systemic dangers from the collapse of U.S.-based Silicon Valley Financial institution have been diminished because the Federal Reserve’s determination to backstop all depositors.
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Losses in Silicon Valley Financial institution’s bond portfolio have highlighted comparable dangers for Japanese lenders’ gigantic international bond holdings and their comparatively low loan-to-deposit ratios.
Hanzawa assured of the well being of the Japanese banking sector, saying that main banks have hedged their positions in international bonds and regional banks have already bought substantial quantities of them.
However he warned that the Silicon Valley Financial institution case confirmed {that a} financial institution run and a subsequent collapse can occur in a matter of some days even when danger administration at banks has been improved.
He additionally stated the setting surrounding the monetary market is altering drastically as a consequence of inflation, rate of interest actions and geopolitical dangers.
“We have to intently monitor financial and market conditions together with credit score prices at particular person banks,” he stated.
Reporting by Makiko Yamazaki; Enhancing by Edmund Klamann and Tomasz Janowski
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