- BOJ says will prod banks to reinforce local weather danger disclosure
- BOJ working with regulator towards local weather situation evaluation
- Define lays out non-monetary coverage steps on local weather change
TOKYO, July 16 (Reuters) – The Financial institution of Japan (BOJ) mentioned on Friday it’ll begin shopping for inexperienced bonds utilizing its overseas reserves as a part of efforts to advertise international funding in actions geared toward combating local weather change.
Japan’s $1.4 trillion in overseas reserves are predominantly held by the Ministry of Finance, not the BOJ, so the choice is probably going a symbolic transfer to lift consciousness about the necessity to promote inexperienced finance. The BOJ holds about $70 billion of these overseas property.
“The quantity excellent of inexperienced bonds within the international market is growing, a development that’s more likely to proceed. Given this case, the Financial institution will buy overseas currency-denominated inexperienced bonds issued by governments and different overseas establishments,” it mentioned.
The transfer comes as different main central banks use their institutional heft to tackle local weather change.
Final week, the European Central Financial institution mentioned local weather change can be a consider coverage regarding disclosure of economic data, danger evaluation, collateral and company sector asset purchases. read more
In an overview of non-monetary coverage steps to battle local weather dangers launched on Friday, the BOJ additionally mentioned it might encourage monetary establishments to reinforce disclosure on local weather dangers.
The BOJ, in collaboration with Japan’s banking regulator Monetary Providers Company, is engaged on pilot workout routines to conduct climate-risk situation evaluation on giant monetary establishments, in response to the define.
The central financial institution, by onsite examinations and offsite monitoring, will discuss with monetary establishments about their efforts to handle local weather dangers and their engagement with debtors to pursue carbon-neutral companies, it mentioned.
“The Financial institution will actively help monetary establishments in figuring out and managing their climate-related monetary dangers, with a view to sustaining the soundness of the monetary system and the smooth-functioning of economic intermediation,” the define mentioned.
The define was launched individually from the BOJ’s financial coverage choice on Friday, which included particulars of a brand new scheme to spice up funding to actions geared toward combating local weather change. read more
Reporting by Leika Kihara and Tetsushi Kajimoto; Enhancing by Chang-Ran Kim and Sam Holmes
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