Financial Services Agency of Japan Disseminates Key International Insights on Bank Capital and Balance Sheet Management During Stress Periods
Tokyo, Japan – August 18, 2025 – The Financial Services Agency (FSA) of Japan has today, August 18, 2025, at 17:00 JST, officially announced the public release of a significant working paper from the Basel Committee on Banking Supervision (BCBS). The paper, titled “Bank capital and balance sheet management in times of stress: International evidence,” offers valuable insights into the practices and effectiveness of capital and balance sheet management by banks during periods of financial distress, drawing upon a wealth of international experience.
This announcement underscores the FSA’s commitment to fostering a robust and resilient financial system by actively sharing and promoting the adoption of globally recognized best practices. The working paper, developed by the BCBS, a key international standard-setter for banking regulation, provides a comprehensive overview of how banks have navigated challenging economic environments and the strategies they have employed to maintain their financial stability.
The content of the working paper is expected to be of considerable interest to financial institutions, regulators, and market participants alike. It delves into critical aspects of bank management during stress, including:
- Capital Management Strategies: The paper likely examines how banks have utilized their capital buffers, managed capital flows, and adapted their capital planning in response to adverse market conditions. This could encompass discussions on the efficacy of regulatory capital frameworks and the practical application of capital management techniques.
- Balance Sheet Management: Furthermore, the document is anticipated to explore the various approaches banks have taken to manage their balance sheets effectively during stressed periods. This might include strategies for asset quality management, liquidity management, funding diversification, and the management of off-balance sheet exposures.
- International Evidence and Best Practices: A core focus of the paper will undoubtedly be the compilation and analysis of international evidence. By drawing on experiences from various jurisdictions, the BCBS aims to identify common challenges faced by banks and highlight successful strategies that have proven effective in mitigating risks and preserving financial stability. This comparative approach is invaluable for informing regulatory policy and enhancing supervisory oversight.
- Lessons Learned: The working paper is likely to distill key lessons learned from past financial crises and periods of heightened market volatility. Understanding these lessons is crucial for proactively strengthening the resilience of the banking sector and preventing future systemic risks.
The FSA’s proactive dissemination of this BCBS working paper signifies its dedication to staying at the forefront of international regulatory developments and promoting sound risk management principles within Japan’s financial industry. By making these insights readily available, the FSA empowers Japanese financial institutions to enhance their own preparedness and resilience, ultimately contributing to the overall stability and strength of the global financial system.
Financial institutions are encouraged to thoroughly review the working paper to gain a deeper understanding of effective strategies for navigating periods of financial stress and to consider how these international best practices can be integrated into their own capital and balance sheet management frameworks. The FSA will continue to closely monitor international developments and foster a collaborative environment to ensure the continued safety and soundness of the Japanese financial sector.
バーゼル銀行監督委員会によるワーキング・ペーパー「ストレス期における銀行の資本及びバランスシート管理：国際的なエビデンス」について公表しました。
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金融庁 published ‘バーゼル銀行監督委員会によるワーキング・ペーパー「ストレス期における銀行の資本及びバランスシート管理：国際的なエビデンス」について公表しました。’ at 2025-08-18 17:00. Please write a detailed article about this news in a polite tone with relevant information. Please reply in English with the article only.