Featured Product

    JFSA Summarizes Stress Testing Exercise, Responds to IFRS Consultation

    December 17, 2020

    JFSA published a paper that discusses the supervisory simultaneous stress testing exercise based on common scenarios, which BOJ and JFSA first conducted in 2020. The paper discusses differences from the institutional arrangements in Europe and the United States, describes the characteristics of the simultaneous stress testing conducted by BOJ and JFSA, and presents timeline and conclusions of the work conducted. In a separate statement, JFSA published the response of the IFRS Council of Japan to the IFRS consultation on sustainability reporting; the Council welcomes and supports the proposal to establish a new standard-setting board for sustainability reporting.

    In response to the consultation on sustainability reporting, the IFRS Council of Japan notes that it supports the establishment of a new standard-setting board for sustainability reporting, under the presumption that the IFRS Foundation will maintain its role and responsibility of improving capital market transparency and efficiency through high-quality standard-setting. The Council also suggested improvements to certain proposals. The Council believes that the primary audience for sustainability reporting should be capital market participants (with investors at the center) and other users of financial information.  The Council noted that it is important for the Sustainability Standards Board (SSB) members to have diverse backgrounds, including the regions they come from and the industries to which they belong. Furthermore, , other ESG factors, especially S (Social) and G (Governance), should also be addressed in parallel to climate change, suggested the Council. Believing that Japan is the largest contributor in the world, the Council pointed out that 320 companies and institutions from Japan support the Task force on Climate-related Financial Disclosures (TCFD) as of November 16, 2020. .  

    The paper on stress testing exercise highlights that the simultaneous stress testing exercise commenced in 2019. The common scenarios were formulated in October 2019 and these scenarios were presented to five major banks in early December 2019; these banks are Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group, Mizuho Financial Group, Sumitomo Mitsui Trust Holdings, and Norinchukin Bank. These participating banks submitted the stress test results by the end of March 2020. Concurrently, BOJ and JFSA also conducted stress tests of each of these participating banks using the same scenarios. From April 2020, BOJ and JFSA jointly compared and examined the submitted stress test results while closely communicating with the participating banks. Subsequently, feedback was provided to the participating banks through mid-July 2020. BOJ and JFSA have already started working on preparations for the next round of simultaneous stress testing, such as the design of the common scenarios. In entering the process for the next round, BOJ and JFSA expect participating banks to report on how their management perceives the issues presented in the feedback and what actions they plan to take. Going forward, BOJ and JFSA will continue to closely work together and further improve the effectiveness of simultaneous stress testing.

     

    Keywords: Asia Pacific, Japan, Banking, Insurance, Securities, Stress Testing, Climate Change Risk, ESG, Reporting, Responses to Consultation, BOJ, JFSA

    Featured Experts
    Related Articles
    News

    BIS Paper Studies Impact of Fintech Lending on Small Businesses in US

    The Bank for International Settlements (BIS) published a paper that studies impact of fintech lending on credit access for small businesses in U.S.

    September 26, 2022 WebPage Regulatory News
    News

    UK Regulators Issue CRR Changes and Stress Test Scenarios for Banks

    The Prudential Regulation Authority (PRA) issued the policy statement PS8/22 to amend the Own Funds and Eligible Liabilities (CRR) Part of the PRA Rulebook and update the supervisory statement SS7/13 titled "Definition of capital (CRR firms).

    September 26, 2022 WebPage Regulatory News
    News

    EBA Launches EU-Wide Transparency Exercise in 2022

    The European Banking Authority (EBA) launched the EU-wide transparency exercise for 2022, with results of the exercise expected to be published at the beginning of December, along with the annual Risk Assessment Report.

    September 23, 2022 WebPage Regulatory News
    News

    SRB on CRR Quick-Fix to Policy for Multiple Point of Entry Banks

    The Single Resolution Board (SRB) welcomed the adoption of the review of the Capital Requirements Regulation, or CRR, also known as the "CRR quick-fix."

    September 22, 2022 WebPage Regulatory News
    News

    EC Rule Lists Advanced Economies for Market Risk Capital Calculations

    The European Commission (EC) recently adopted the Delegated Regulation 2022/1622, which sets out the regulatory technical standards to specify the countries that constitute advanced economies for the purpose of specifying risk-weights for the sensitivities to equity.

    September 21, 2022 WebPage Regulatory News
    News

    EBA Publishes Final Regulatory Standards on STS Securitizations

    The European Banking Authority (EBA) published the final draft regulatory technical standards specifying and, where relevant, calibrating the minimum performance-related triggers for simple.

    September 20, 2022 WebPage Regulatory News
    News

    ECB Further Reviews Costs and Benefits Associated with IReF

    The European Central Bank (ECB) is undertaking the integrated reporting framework (IReF) project to integrate statistical requirements for banks into a standardized reporting framework that would be applicable across the euro area and adopted by authorities in other EU member states.

    September 15, 2022 WebPage Regulatory News
    News

    EBA Publishes Funding Plans Report, Receives EMAS Certification

    The European Banking Authority (EBA) has been awarded the top European Standard for its environmental performance under the European Eco-Management and Audit Scheme (EMAS).

    September 15, 2022 WebPage Regulatory News
    News

    MAS Launches SaaS Solution to Simplify Listed Entity ESG Disclosures

    The Monetary Authority of Singapore (MAS) set out the Financial Services Industry Transformation Map 2025 and, in collaboration with the SGX Group, launched ESGenome.

    September 15, 2022 WebPage Regulatory News
    News

    BCBS to Finalize Crypto Rules by End-2022; US to Propose Basel 3 Rules

    The Basel Committee on Banking Supervision met, shortly after a gathering of the Group of Central Bank Governors and Heads of Supervision (GHOS), the oversight body of BCBS.

    September 15, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8521