2012年-IMF国际货币组织全球_Japan_Basel_Core_Principles_for_Effective_Banking_Supervision_Detailed_Assessment_of_Compliance_104页_1007kb

Japan: Basel Core Principles for Effective Banking Supervision—Detailed Assessment of Compliance

Core Content Overview

This document provides a detailed assessment of Japan's compliance with the Basel Core Principles (BCP) for Effective Banking Supervision, conducted in late 2011 as part of the Financial Sector Assessment Program (FSAP) Update. It was the first full review under the revised 2006 BCP methodology and highlights Japan's banking regulatory and supervisory framework, its macroeconomic setting, and the key challenges and recommendations for improvement.

Key Findings

• Structural Soundness: Japan's banking supervision framework is structurally sound, with a legislative and operational set-up that largely complies with the BCP.
• Post-Earthquake Stability: The financial system weathered the Great East Japan Earthquake in 2011 and showed resilience, thanks to swift actions by the Financial Services Agency (FSA) and the Bank of Japan (BOJ).
• Regulatory Improvements: Since the 2003 FSAP, Japan has introduced improvements to its regulatory and supervisory framework, including the FSA's "better regulation" program and enhanced supervisory practices post-crisis.
• Banking Sector Characteristics:
  • High Concentration: The banking sector is highly concentrated, with Japan Post Bank (JPB) holding a quarter of total deposits and city banks holding around 40%.
  • Low Profitability: Japanese banks suffer from low profitability due to declining net interest margins (NIM) and weak credit demand.
  • Asset Structure: Loans make up over half of total bank assets, while securities account for about a quarter. JGB holdings have increased, raising market risk exposure.
  • Loan Quality Concerns: Loan quality remains a challenge, especially for regional banks, due to weak economic growth and rising bankruptcy rates.
  • Capital and Liquidity: Basel II was implemented in 2007, with capital requirements of 8% for internationally active banks and 4% for others. Banks have a strong liquidity position, supported by a large and stable deposit base.
• Systemic Risks: The sector remains exposed to vulnerabilities, including high JGB exposure, capital adequacy issues, and operational, funding, and governance risks from overseas expansion.

Main Recommendations

• Enhance Risk Management Practices: Improve the risk-focused approach in regulatory frameworks and ensure stronger implementation of risk management measures.
• Strengthen Governance and Transparency: Enhance corporate governance and ensure greater transparency in financial reporting, particularly for SMEs and regional banks.
• Improve Capital Adequacy: Address capital adequacy issues, especially for non-megabanks, by encouraging more robust capital raising and risk mitigation strategies.
• Develop More Comprehensive Market Risk Frameworks: Given the increasing exposure to JGBs and equity holdings, there is a need for more comprehensive frameworks to manage market risks.
• Strengthen Resolution Mechanisms: Improve the resolution and collection process for failed banks to ensure financial stability and effective deposit insurance coverage.

Detailed Assessment of Compliance with Basel Core Principles

The assessment used a five-point rating system to evaluate compliance with the BCPs:

• Compliant: All essential criteria are met without significant deficiencies.
• Largely Compliant: Minor shortcomings exist, but there is clear intent to achieve full compliance within a defined timeframe.
• Materially Noncompliant: Severe shortcomings exist, and supervision has not been effective.
• Noncompliant: Significant non-implementation of essential criteria or ineffective supervision.
• Non-applicable: Criteria are not relevant to the Japanese context.

The assessment emphasized the importance of compliance with essential criteria, and the methodology allowed for alternative approaches as long as the core objectives of the BCPs were met. It also noted that some regulatory initiatives were still under consultation or implementation.

Institutional and Regulatory Framework

• FSA and BOJ: The FSA oversees financial services regulation, while the BOJ conducts on-site and off-site examinations and monitoring. The FSA is the single universal regulator.
• Crisis Management: The Financial System Management Council (FSMC) is responsible for government intervention in troubled financial institutions. It includes the Prime Minister, Chief Cabinet Secretary, and other key officials.
• Deposit Insurance: The DICJ manages the deposit insurance system and injects capital into failing banks. It works closely with the Resolution and Collection Corporation (RCC) to manage failed institutions.
• Accounting and Auditing: Japan has developed a robust accounting framework, with convergence towards IFRS ongoing. The CPAAOB and JICPA ensure independence and quality in external audits.

Market Discipline and Transparency

• Disclosure Requirements: The Banking Act mandates annual financial reports for banks, while corporate law and the Financial Instruments and Exchange Act require transparency for shareholders and listed companies.
• Public Access: Financial statements are made available to the public, and information on corporate decisions is disclosed through TDnet, an online system used by securities exchanges.
• Corporate Governance: The FSA's Supervisory Guidelines and Inspection Manuals outline corporate governance expectations, though not legally binding, they are enforceable through administrative actions.

Macroeconomic and Institutional Setting

• Market Structure: Japan's financial system is dominated by large banks, particularly the three megabanks and JPB. The sector is fragmented, with around 2,000 deposit-taking institutions.
• Liquidity and Funding: Banks have a strong liquidity position, with low loan-to-deposit ratios and minimal reliance on short-term wholesale funding.
• Macro Prudential Oversight: The BOJ plays a key role in macro prudential oversight, releasing the Financial System Report (FSR) semi-annually to assess systemic risks.
• Financial System Council (FSC): The FSC within the FSA provides general advice on the financial system and handles long-term strategic issues.

Conclusion

Japan's banking system is resilient and well-regulated, with a strong institutional framework. However, the assessment identifies areas for improvement, particularly in risk management, corporate governance, and capital adequacy. The recommendations aim to enhance the effectiveness of the supervision framework in line with the 2006 BCPs, ensuring continued financial stability and resilience in the face of evolving global challenges.