MNI BRIEF: Banks Must Be Vigilant Against Higher Rates - BOJ

Japanese commercial banks must be vigilant against tail risks from a prolonged period of higher rates from global central banks that could trigger a slowdown in the global economy, the Bank of Japan’s Financial System Report said on Friday, with the bank also noting similiar concerns over uncertainties in the financial markets.

"Banks need to be prepared to appropriate manage a variety of risks associated with interest rate fluctuations. Banks are more resilient against the stress of inverted foreign yield curves,” the BOJ noted in

As for the latest assessment, the BOJ maintained the baseline view, saying, “Japan’s financial system remains stability on the whole,” noting that Japanese banks have "sufficient capital bases to perform financial intermediation activities appropriately even amid the global tightening of financial conditions and the resultant various types of stress”.

Next week, MNI will speak with the IMF's Tobias Adrian on the Washington-based institution's latest Global Financial Stability report. Registration for the webcast is open now (INVITE: MNI Webcast with IMF's Tobias Adrian On Oct 25)