BOJ introduces a special deposit facility that will run for three years
- +0.1% interest p.a. will be paid to excess reserves in special deposit facility
- That is provided eligible financial institutions meet certain requirements
- Full release
The requirements laid out by the BOJ are as per the following:
- Being committed to contributing to sustainable development of regional economies
- Either to strengthen business foundations to a designated degree, or to make an institutional decision on mergers, business integration, or certain forms of acquisitions toward strengthening business foundations
- There being no special circumstances in which such remunerations are deemed inappropriate
In other words, the facility introduced here is to lift some of the burden on regional banks as they deal with the virus pandemic as well as lower profitability from negative rates.
