Japan’s Regional Banks Face Shake-up as Regulator Shifts Strategy

Japan’s struggling regional banks face their biggest shake-up since the 1990s under plans outlined by the country’s top financial regulator, as weak profitability and years of zero interest rates loom over the long-term stability of the industry, the Financial Times reported. Toshihide Endo, commissioner of the Financial Services Agency, told the Financial Times that the sweeping reforms could also boost the nation’s ailing regional economies, which have been stricken by falling demand as Japan’s population declines. The plans include letting regional lenders participate in areas outside their core business for the first time since the second world war, meaning that banks could turn themselves into management consultants and trading companies as they seek new ways to generate profit. Read more