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Nearly 90% of Japan regional banks receive payments under BOJ scheme -Breaking

by Mike Robinson

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© Reuters. FILEPHOTO: A protective mask-wearing man walks past Bank of Japan’s headquarters amid the outbreak of coronavirus disease COVID-19 in Tokyo (Japan), May 22, 2020.

By Leika Kihara

TOKYO, Reuters – On Friday the Bank of Japan announced that it offered payment to almost 90% of Japan’s regional lenders as part of a program to revive the sector by encouraging mergers and cutting costs.

In accordance with the program, the BOJ paid 0.1% interest starting in September on deposits that were held at the central banks by regional lenders, which reduce costs or boost profits.

According to the BOJ, out of approximately 100 banks located in Japan, only 86 are eligible for the payment.

To encourage banks in regional areas, which are already struggling from low interest rates for a long time and a shrinking population, to streamline their operations or consolidate to better weather the worst of times, the BOJ created this scheme.

Critics claim that the program goes above the boundaries of central banks by providing payouts to specific industries with the goal of driving reform.

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