Exclusive: Japan banking regulator examines impact of coronavirus restrictions on local economies

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© Reuters. FILE PHOTO: An empty breakfast buffet is seen at the Osaka Corona Hotel in Osaka

By Takahiko Wada TOKYO (Reuters) – Japan’s banking regulator is surveying regional lenders on how local businesses are coping with new restrictions to contain COVID-19, while seeking to prevent an increase in bankruptcies, they told Reuters four sources with direct knowledge of the matter. . The Financial Services Agency (FSA) survey follows the government‘s implementation of state of emergency measures last month that could destabilize regional economies, the sources said. While lawmakers emphasize that Japan’s banking system remains stable as a whole, the move underscores their concern about the prolonged and growing damage that the coronavirus pandemic is inflicting on businesses and banks. “Financial institutions must do everything possible to support corporate financing,” said one of the sources. “Given the need to help regional economies revitalize after the pandemic, we must avoid a huge increase in bankruptcies.” The sources spoke on condition of anonymity, as they were not authorized to speak publicly. In response to questions from Reuters, the FSA said: “Since March last year, we have made the efforts of financial institutions to support businesses a priority in our inspections and oversight.” From time to time, depending on the circumstances, institutions are continually asked about the status of their support and the status of their clients. ”Japan placed 11 of its 47 prefectures in a state of emergency last month, with Containment measures focused on reducing business hours in bars and restaurants, and suspending a subsidized tourism initiative. The government lifted the state of emergency for one of the 11 prefectures as of Monday. But the capital Tokyo still has restrictions, which it bodes ill for some regional areas that depend on tourists from big cities.

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