“The rapid and abundant provision of liquidity from central banks and international institutions avoided the negative feedback loop between economic and financial activities,” it said on Tuesday. the Governor of the Bank of Japan (BOJ), Haruhiko Kuroda, according to Reuters. Despite the description, he acknowledged that “considerable uncertainty continues.”
According to Kuroda, coordination of fiscal and monetary policies was faster and more complete this time than during the global financial crisis. “The postponement of the full implementation of the Basel III standards, the stimulus for banks to use capital, the liquidity buffers have contributed to ensuring the proper functioning of financial intermediation,” he added.
The BoJ governor warned that due attention should be paid to the possible shift in the challenges faced by businesses and households from liquidity to solvency, which could affect the future financial system.
Kurdo added that structural changes in the financial system will need to be carefully examined given the growing importance of non-banks in financial intermediation.
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