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2009年3月21日 (土)

金融緩和強化 「あらゆる政策」が必要だ

The Yomiuri Shimbun (Mar. 20, 2009)

Govt-BOJ cooperation crucial to overcome crisis

金融緩和強化 「あらゆる政策」が必要だ(320日付・読売社説)

The Japanese and U.S. central banks have taken concerted action to strengthen monetary easing policies.


Cooperation between the two financial entities can be seen as a sign of their strong determination to overcome the financial crisis and the worldwide recession.


On Wednesday, the Bank of Japan said it would boost its monthly purchase of long-term government bonds from the current \1.4 trillion to \1.8 trillion. This increase pans out at about \5 trillion a year and the size of the total purchase over a year will exceed \20 trillion.


There are signs that stock prices are recovering, but more turmoil is expected for the financial market. We hope the market will become increasingly stable as abundant funds are supplied. The Bank of Japan's increase of its monthly purchase of long-term government bonds is expected to hold down climbing interest rates caused by the issuance of additional government bonds undertaken to finance economic stimulus measures.


After the Bank of Japan's announcement, the U.S. Federal Reserve Board said it would spend up to $300 billion (about \29 trillion) over the next six months to buy long-term government bonds. The size of the Fed's purchase of long-term government bonds is larger than that of the Bank of Japan.


On March 5, the Bank of England decided to introduce a quantitative easing policy. The European Central Bank also is considering a similar move.



No easy solutions

These steps are welcome because they are in accordance with an agreement made at the meeting of finance ministers and central bank chiefs from the Group of 20 major and emerging nations to do everything possible to revive growth and end the global financial crisis.


However, because this financial crisis was triggered by losses from financial products engineered in a complex manner, solutions will not be easy. Major and emerging nations should further strengthen measures for financial market stability.


Following the stunning collapse of the U.S. investment bank Lehman Brothers Holdings Inc. in September, the Bank of Japan has twice lowered its key interest rate and twice boosted its purchase of government bonds. It also decided to buy assets, such as corporate bonds and equity shares held by banks, at the risk of suffering losses.


On Tuesday, the Bank of Japan also decided to provide up to \1 trillion in subordinated loans to commercial banks to boost their capital that has been depleted by falling stock prices.



BOJ running out of tricks

Partially due to the divided Diet, in which the ruling parties hold a majority in the House of Representatives and the opposition block controls the House of Councillors, the government has been unable to implement economic stimulus measures in a speedy manner. It is clear that the Bank of Japan's flexible responses have complemented the government's slow responses to buoy the economy.


But if the Bank of Japan takes too many risks that could result in losses, there is the worry that this could damage the trust it has as a central bank. It seems the Bank of Japan is reaching its limit on measures it can take independently.


For example, in order to avoid risking huge losses, the amount the central bank will provide in subordinated loans to commercial banks will be up to \1 trillion. The target of the loans will be limited to major banks and influential regional banks. Small and midsize banks, which probably have the greatest need for the loans, are excluded.


To ensure the effectiveness of its capital infusion, it is advisable for the Bank of Japan to devise ways to expand both the amount and the target for the loans without harming its credibility. One possible way to do this is to provide government loss-covering guarantees.


We hope that the Bank of Japan will spare no effort to overcome the current crisis by cooperating with other central banks and the government.


(From The Yomiuri Shimbun, March 20, 2009)

20093200152  読売新聞)


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