Bank of Japan monetary policy board member Suzuki speaking
- keeping rates very low could have unusual effects, side-effects on economy
- changes in economy, credit cycle could increase credit costs for financial institutions
- financial institutions' profits, business health are getting more vulnerable to domestic, overseas market developments
- when interest rates are too low, they narrow financial institutions' margin and lead to decrease in bank lending
- if lending rates fall further, financial institutions could start charging fee on deposits which could cool consumption, economy
- it is becoming increasingly important to guide monetary policy with an eye not just on price stability, but on financial system stability
- once financial system destabilises, that could make it very difficult to achieve BOJ's price target
I bolded that one point, although much of what he is saying is noteworthy.
I would be very hesitant to suggest though that its anything but more easing ahead from the BOJ.
