BoJ indicated in a statement today that it’s ready to relax some requirements for financial institutions to participate in its market operations. It firstly reiterated that institutions are subject to “capital buffer and liquidity cover ratio (LCR) requirements”.
However, “Even if a financial institution does not satisfy the requirements prescribed in the laws and regulations, in cases where the Bank judges that there is a high probability that the institution will steadily improve toward meeting these requirements, the institution remains eligible for the operations.”
BoJ is “confirming this application of eligible standards in view of the need for financial institutions to provide support for firms’ funding conditions due to the growing impact of the novel coronavirus (COVID-19).”
