“Financial Inspection Manual” abolished by the end of this year FSA Sept. 11, 4:03
The “Financial Inspection Manual”, a guidebook that the Financial Services Agency once urged banks to deal with non-performing loans, will be abolished by the end of this year. In the future, we will focus on verifying whether loans are based on the local economy rather than dealing with non-performing loans, and the financial inspection will change about 20 years after the financial crisis.
The Financial Inspection Manual was introduced to expedite the resolution of the non-performing loan problem after the financial crisis in the late 1990s, when the Japan Long-Term Credit Bank and the Hokkaido Takushoku Bank went bankrupt one after another.
The figure of the inspector who forced banks to deal with bad debts accumulated from the bubble period was also drawn in novels and dramas, and the manual was also a symbol of strict financial administration.
Financial institutions then reduce non-performing loans, but recently faced new problems with worsening profits at low interest rates in addition to population decline.
For this reason, the FSA decided to abolish the manual within the year and introduce a new inspection policy.
Unlike the past, where non-performing loans were checked on a uniform basis, we will now listen to management strategies for each financial institution.
And it is a form that examines whether or not the loan is made based on the actual situation of the local economy and focuses on whether the management of the financial institution is sustainable.
Over 20 years have passed since the financial crisis in Japan, where bankruptcies and reorganizations of financial institutions continued, and financial inspections will change.