BOJ’s Nakaso: Bank consolidation may enhance Japan’s financial stability

TOKYO (Reuters) – Bank of Japan Deputy Governor Hiroshi Nakaso said on Wednesday consolidation and reorganization of financial institutions could be effective in enhancing Japan’s financial stability.

“Regional financial institutions have sufficient capital and liquidity at present. Thus, there are no immediate threats to the stability of the financial system,” Nakaso said in a speech at a seminar in Tokyo.

But an indicator extracted from the stock market indicates the possibility that business conditions will become unstable “simultaneously” at many regional financial institutions facing chronic stresses from a dwindling population and a lack of fund demand, he said.

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