On April 21, JBA submitted its opinion on the “Draft Ministry Ordinance Stipulating Necessary Matters for Implementing Crisis-Handling Operations of the Japan Finance Corporation” to the Ministry of Finance. The draft ministry ordinance stipulates necessary matters when providing credit to designated financial institutions to handle “crises” such as local financial unrest or large natural disasters. The outline of the opinion is as follows.
- When deciding the scope of crisis-handling operations (area, nature of crisis, etc.), loan conditions, screening criteria, etc., it is important to arrange them in such a way that the whole scheme is feasible and private financial institutions may participate easily during times of crises.
- With regard to customer loans whose risks are supplemented by the crisis-handling operations, written clarification should exist that indicates how to deal with bank reserve, self-assessment, the bank inspection manual and capital adequacy standard regulations.