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(CEP News) - Back at their September meeting, Bank of Japan members foresaw the coming deterioration in global financial markets. Minutes from their Sept. 16-17 and Sept. 18 meetings were released Friday morning.
One member of the bank said the current market turmoil could eventually affect Japanese banks, and all agreed attention must be paid to risk and the potential harm from market uncertainties. During the days before and after the BOJ's September meeting, a series of negative events were taking place on Wall Street. The bankruptcy of Lehman Brothers, and the U.S. $85 billion loan to bailout insurance giant AIG had been announced in the days before the meeting. On the 17th, Morgan Stanley announced it was looking for a buyer and the U.S. Securities and Exchange Commission announced its temporary ban on short-selling. In the minutes, Bank of Japan members turned to European banks, and expressed concern over a potential capital problem. The worries came before the partial nationalization of Fortis bank and the sale of a majority of its assets to BNP Parisbas earlier this week. All bank members agreed global inflationary pressures remained elevated, and that Japan's growth path could be delayed. The Bank of Japan held rates at 0.50% at its September meeting. By Megan Ainscow,
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