TOKYO, Oct 27 (Reuters) - A Japanese ruling party committee on Tuesday submitted a proposal to regulatory reform minister Taro Kono calling on the Financial Services Agency (FSA) and the central bank to streamline bank inspections to avoid duplication of efforts.
The FSA conducts inspections on financial institutions as the country’s banking regulator. The Bank of Japan (BOJ) separately conducts its own examinations as lender of last resorts, leading to criticism from some institutions of overlaps between the two.
The Liberal Democratic Party’s policy research council proposed that the two institutions set up a shared monitoring system for data from FSA and BOJ inspections.
“It’s necessary to set up a data system and create a system for receiving data without imposing a burden (on financial institutions),” said Masanobu Ogura, chief secretary of the party’s research commission on the finance and banking systems.
He stressed that Japan should conduct sufficient macro-prudential measures to manage risks of the overall financial system, even as it seeks to ease the burden on financial institutions.
The committee plans to submit the proposal to Finance Minister Taro Aso, who also oversees banking regulation, as well as to the central bank.
In the plan, the committee also proposed having the FSA and BOJ avoid conducting examinations of similar issues shortly after each other.
Financial institutions can be burdened by such things, such as when they receive a substantial amount of surveys on how much cash-flow support they are receiving for dealing with the impact of the novel coronavirus pandemic, Ogura said.
“We want to reduce such a burden,” he said. (Reporting by Daniel Leussink Editing by Robert Birsel)
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