The Bank of Japan (BOJ) announced partial revision of the creditworthiness criteria under the complementary lending facility and published a paper that examines regional banks’ efforts in addressing climate change. Additionally, the Financial Services Agency of Japan (JFSA) published the results of consultation on partial revisions to the guidelines related to crypto-asset exchange service providers and the comprehensive guidelines for supervision of financial instruments business operators, etc." concerning environmental, social, and governance (ESG) investment trusts. JFSA also issued public notices on the capital adequacy regulations (Pillars 1 and 3) and a draft ordinance for partial revisions of the regulations for enforcement of the Banking Act.
As part of the key developments BOJ
- announced partial revision of the creditworthiness criteria for approving borrowers and selecting borrowers for operations under the complementary lending facility, which will be implemented from March 31, 2023. The revised criteria will be applied when the BOJ newly selects borrowers and operations under the complementary lending facility from the same day onwards.
- published a paper that examines current status of regional banks' efforts to support business partners comply with regulations and manage climate-related financial risks, to serve as a reference for further efforts by regional financial institutions to address climate change. By promoting these initiatives, regional financial institutions will not only acquire new profit opportunities, but also reduce climate-related financial risks in their own banks, thus maintaining and differentiating their competitiveness as financial institutions.
In addition, JFSA published
- results of the consultation on draft partial revision of operational guidelines for financial institutions related to crypto asset exchange service providers. The revisions include clarification of the interpretation of crypto-assets' eligibility for various tokens such as items and contents issued on the blockchain, supervisory response to crypto asset exchange service providers in light of the diversification of business models, and supervisory measures for the crypto asset exchange service providers. The revised administrative guidelines will be applicable from the date of issue of the document.
- results of the consultation on partial revisions to the comprehensive guidelines for supervision of financial instruments business operators, etc. Based on the feedback received, JFSA plan to revise the comprehensive guidelines for supervision of financial instruments business operators, etc., define the scope of ESG investment trusts, and establish public offering investment trusts related to ESG. JFSA will also establish specific verification items for information disclosure and the development of systems for results of the consultation on partial revisions to public notices concerning capital adequacy regulations (Pillars 1 and 3) concerning Shinkin banks, the Federations of Shinkin Banks, and Final Designated Parent Companies. The partial revisions to the public notices and articles concerning Shinkin Banks, Federations of Shinkin Banks, and Final Designated Parent Companies will be promulgated on March 28, 2023.
- proposal for establishing criteria for indicating the soundness of large-scale credit extensions, etc., which the final designated parent company sets as a standard for judging the soundness of the management of the final designated parent company and its subsidiaries, etc. (Draft)" and "Cabinet Office Ordinance (Draft) for partial revision of the regulations for enforcement of the Banking Act." The Cabinet Office Ordinance, Notification, etc. on this matter were promulgated on March 30, 2023 and will be enforced and applied from March 31, 2024.
Keywords: Asia Pacific, Japan, Banking, Reporting, Basel, Credit Risk, Climate Change Risk, Sustainable Finance, Regtech, Blockchain, Regulatory Capital, Lending, Crypto Service Providers, Capital Adequacy Ratio, Guidelines, Financial Instruments, Disclosures, Investment Trusts, ESG, BOJ, JFSA
Previous ArticleCMF Sets Out Requirements for Systemically Important Banks
The European Banking Authority (EBA) has published the final templates, and the associated guidance, for collecting climate-related data for the one-off Fit-for-55 climate risk scenario analysis.
The European Banking Authority (EBA) recently published a report that recommends enhancements to the Pillar 1 framework, under the prudential rules, to capture environmental and social risks.
As a follow on from its prudential standard on the treatment of crypto-asset exposures, the Basel Committee on Banking Supervision (BCBS) proposed disclosure requirements for crypto-asset exposures of banks.
The Basel Committee on Banking Supervision (BCBS) and the European Banking Authority (EBA) have published results of the Basel III monitoring exercise.
The Prudential Regulation Authority (PRA) recently issued a few regulatory updates for banks, with the updated Basel implementation timelines being the key among them.
The U.S. Department of the Treasury has recently set out the principles for net-zero financing and investment.
The European Commission (EC) launched a stakeholder survey on the draft International Guiding Principles for organizations developing advanced artificial intelligence (AI) systems.
The finalization of the two sustainability disclosure standards—IFRS S1 and IFRS S2—is expected to be a significant step forward in the harmonization of sustainability disclosures worldwide.
Decentralized finance (DeFi) is expected to increase in prominence, finding traction in use cases such as lending, trading, and investing, without the intermediation of traditional financial institutions.
The Basel Committee on Banking Supervision (BCBS) published reports that assessed the overall implementation of the net stable funding ratio (NSFR) and the large exposures rules in the U.S.