BOJ Tells Fed Credit Rules May Hinder Japan Monetary Policy
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Federal Reserve plans for rules on credit risk may hamper monetary policy in Japan and have an “adverse impact” on the liquidity of high-quality sovereign debt, the Japanese central bank said in a letter to the Fed.
Single-counterparty credit limits “could have unintended impacts on non-U.S. financial systems,” Bank of Japan Executive Director Kenzo Yamamoto said in the letter dated April 28 and posted on the central bank’s website today.