Key issues regarding rising unrealized losses on regional financial institutions’ bond holdings
Key points
- FSA plans to revise “Early Warning System” and apparently wants to verify unrealized gains and losses on all bond holdings, including held-to-maturity securities
- Regional financial institutions generally have high capital ratios, but situation appears to vary from bank to bank
- Possibility of impairment losses on JGB holdings has also been noted, and we anticipate continued rebalancing of bond portfolios