Macroprudential policy in Japan

Abstract

In Japan, the Bank of Japan (BOJ) collaborates with the Financial Services Agency (FSA) in formulating and implementing macroprudential policy. This policy has enabled those institutions to timely identify and effectively mitigate the risk of a disruption to the provision of financial services. Macroprudential policy includes a system of instruments, which are used to contain systemic or system-wide financial risk. Most importantly, this policy conveys a clear message about on-site examinations in order to forecast and respond to financial imbalances in the financial system. This article presents the experiences of Japan in implementing macroprudential policy, especially key attributes on macroprudential surveillance in Japan.