Japan: Financial Sector Assessment Program-Technical Note-Systemic Risk Analysis and Stress Testing the Financial Sector

September 18, 2017

Preview Citation

Format: Chicago

Japan: Financial Sector Assessment Program-Technical Note-Systemic Risk Analysis and Stress Testing the Financial Sector, (USA: International Monetary Fund, 2017) accessed November 23, 2024

Summary

This Technical Note discusses the results of stress testing of the financial sector in Japan. The Japanese financial system appears generally resilient to short-term risks, but pockets of vulnerability exist. Overall, banks appear to have sufficient capital and liquidity buffers to cope with a scenario of severe recession owing to disruptions in global trade, and accompanied by a sharp increase in interest rates and risk premiums, and a decline in equity prices. Spillovers within the system also appear to be limited. At the same time, resilience is not equal among all institutions included in the analysis. Some life insurance companies and regional banks may need to strengthen their capital buffers.

Subject: Banking, Financial institutions, Financial sector policy and analysis, Insurance companies, Solvency, Solvency stress testing, Stocks, Stress testing

Keywords: Asia and Pacific, Balance sheet, BoJ facilities, Cash flow, City bank, CR, Credit risk, Financial system, Funding shock, Global, Hurdle rate, IMF staff calculation, Insurance companies, Investment trust, ISCR, Market liquidity risk, Market liquidity shock, Market share, Return on assets, Solvency, Solvency stress testing, Stocks, Stress test, Stress testing, U.S. dollar, U.S. dollar-liquidity analysis

Publication Details

Pages:

126
Volume:

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DOI:

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Issue:

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Series:

Country Report No. 2017/285
Stock No:

1JPNEA2017008
ISBN:

9781484319819
ISSN:

1934-7685

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