The commissioner of the Japanese Financial Services Agency (FSA), the authority on financial regulation, has said that local banks in the country should not hold the Bank of Japan responsible for any problems in the economic state.
The head of the FSA, Toshihide Endo, has also encouraged regional banks to look into ways in which to cope with low-interest rates as they are at the moment.
According to Reuters, Endo said that the banks “should not just sit and wait for the [Bank of Japan] to change its policy.” He then posed the question of whether “everything [will] be alright if it seeks exit and normalizes interest rates” and then immediately answered that he does not think so.
According to data drawn up by the FSA report, the national banks were totaling profits of ¥1.2 trillion yen (which translates to around $10.9 billion USD) in the financial year which ended March which is a 30% decrease compared to data from five year ago.
With regards to the introduction of blockchain and digital currencies, Endo said the FSA was attempting to find a balance between protecting users and investors from the risk of scam projects and allow and encourage the industry to look to innovation in the technology.
Following the major money heist which saw $530 million USD worth of NEM stolen from Coincheck Inc in January of this year, the FSA has taken a stricter approach on the industry. In May, the agency declared that cryptocurrency exchanges would need to abide by five rules newly put in place in order to continue trading.
Inspections that the FSA have carried out found that management at many of the exchanges was underperforming in ways which could harm the economy, such as the lack of basic internal controls which see that money laundering is avoided as well as protecting their users protected from fraud schemes.
Despite ill-management, Endo does not want to shut down crypto-activity, saying that they “have no intention to curb (the crypto industry) excessively,” but that they “would like to see it grow under appropriate regulation.”