{"id":25576,"date":"2023-04-27T04:44:56","date_gmt":"2023-04-27T04:44:56","guid":{"rendered":"http:\/\/lynettelockhart.com\/client\/japan-ex-regulator-head-warns\/"},"modified":"2023-04-27T05:37:48","modified_gmt":"2023-04-27T05:37:48","slug":"japan-ex-regulator-head-warns","status":"publish","type":"post","link":"http:\/\/lynettelockhart.com\/client\/japan-ex-regulator-head-warns\/","title":{"rendered":"Japan ex-regulator head warns against excess regulation aimed at stopping digital bank runs"},"content":{"rendered":"<p>By Takaya Yamaguchi and Tetsushi Kajimoto<\/p>\n<p>TOKYO (Reuters) &#8211;     Financial authorities must be mindful of the risk of excessive regulation aimed at preventing digital bank runs caused by online rumours and speculation, said the former commissioner of Japan&#8217;s Financial Services Agency (FSA).<\/p>\n<p>The failure of Silicon Valley Bank and Signature Bank in the United States revealed the speed and size of withdrawals during such runs, but heavy-handed responses must be avoided to prevent stifling the industry, Shinsei Bank Chairman Hirofumi Gomi said.<\/p>\n<p>&#8220;If you try to contain withdrawals through additional regulation, that will only open the door for other loopholes in markets,&#8221; Gomi told Reuters in an interview on Wednesday. &#8220;It would put major restrictions on bank functions such as loan-deposit activity.&#8221;<\/p>\n<p>Gomi became a career bureaucrat after joining the Ministry of Finance in 1972. He spent the late 1990s and early 2000s as a senior FSA official dealing with bank and brokerage failures during the post-bubble financial crisis, before becoming commissioner from 2004 to 2007.<\/p>\n<p>Speculation is rife that the Bank of Japan may tweak or even ditch its yield control policy under new Governor Kazuo Ueda, who chairs his first policy-setting meeting on April 27-28.<\/p>\n<p>Gomi said interest rate hikes would be welcomed by banks which have struggled to lift profit due to side effects of prolonged ultra-loose monetary policy under Ueda&#8217;s predecessor Haruhiko Kuroda.<\/p>\n<p>&#8220;Continuing low interest rates won&#8217;t push up economic growth potential,&#8221; Gomi said. &#8220;Gradual increases in interest rates will lay the groundwork for banks to raise profit.&#8221;<\/p>\n<p>&#8220;Hasty tightening could have a greater (negative) impact on the real economy though, which would affect banks&#8217; lending attitude and widen unrealised loss from bonds.&#8221;<\/p>\n<p \/>\n<p> (Reporting by Tetsushi Kajimoto and Takaya Yamaguchi; Editing by Christopher Cushing)<\/p>\n<p><a href=\"http:\/\/lynettelockhart.com\/client\/japan-ex-regulator-head-warns\/file-photo-a-man-walks-past-the-headquarters-of-bank-2\/\"><img decoding=\"async\" src=\"http:\/\/lynettelockhart.com\/client\/wp-content\/uploads\/Reuters_Direct_Media\/USOnlineReportEconomy\/tagreuters.com2023binary_LYNXMPEJ3Q03W-VIEWIMAGE.jpg\" alt=\"tagreuters.com2023binary_LYNXMPEJ3Q03W-VIEWIMAGE\"><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>By Takaya Yamaguchi and Tetsushi Kajimoto TOKYO (Reuters) &#8211; Financial authorities must be mindful of the risk of excessive regulation aimed at preventing digital bank runs caused by online rumours and speculation, said the former commissioner of Japan&#8217;s Financial Services Agency (FSA). The failure of Silicon Valley Bank and Signature Bank in the United States [&hellip;]<\/p>\n","protected":false},"author":8,"featured_media":25577,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"spay_email":"","footnotes":""},"categories":[1216],"tags":[],"class_list":["post-25576","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-u-s-economy"],"jetpack_featured_media_url":"http:\/\/lynettelockhart.com\/client\/wp-content\/uploads\/Reuters_Direct_Media\/USOnlineReportEconomy\/tagreuters.com2023binary_LYNXMPEJ3Q03W-VIEWIMAGE.jpg","_links":{"self":[{"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/posts\/25576","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/comments?post=25576"}],"version-history":[{"count":1,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/posts\/25576\/revisions"}],"predecessor-version":[{"id":25578,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/posts\/25576\/revisions\/25578"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/media\/25577"}],"wp:attachment":[{"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/media?parent=25576"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/categories?post=25576"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/tags?post=25576"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}