FSA Weekly Review No.484

*Nankai Trough Guidelines were formulated by the Cabinet Office [in charge of disaster prevention] on March 29, 2019, based on the enforcement of the amendments (as of November 2013) to the "Act on Special Measures concerning Advancement of Countermeasures against Disasters of Tonankai and Nankai Earthquakes" to include Tokai Earthquakes in Nankai Trough Earthquakes. The said amendments (as of November 2013) were made in response to the Japanese Government's decision to carry out a study based on the assumption that a huge earthquake and tsunami can occur in a wide area along the Nankai Trough, not limited to the Tokai region.

(1)To take another two-year temporal measure (until the end of March 2024) for excluding the outstanding balance of financial institutions' current accounts at the Bank of Japan (BOJ) from the calculation of the leverage ratio exposures, and

(2)To amend the disclosure form for G-SIB assessment in the capital adequacy ratio regulations (Pillar III) in accordance with international standards.

* Council meetings were held from June 2021 through March 2022, in which the council members mainly discussed favorable ways to subdivide fire insurance premium rates in accordance with water damage risks and points to consider where non-life insurers and others implement relevant initiatives thereof.

* This Technical Committee has been established under the "Expert Panel on Sustainable Finance" to aggregate a wide range of information on green bonds, etc., as well as ESG (Environmental Social and Governance) rating and data providers. The Committee is composed of practitioners, market participants, and academics who are involved in ESG assessment and data provision, along with observers of officials from pertinent ministries and agencies. The FSA (Strategy Development Division, Strategy Development and Management Bureau) serves as the secretariat.

* The majority of the data reflects the data until February 28, 2022, whereas the data of cooperative financial institutions reflects the data until December 31, 2021.

* On September 9, 2019, the FSA set forth the KPIs (key performance indicators) to objectively reflect the efficiency of financial intermediation. Ever since then, the FSA has required financial institutions to publish their respective KPI results on their websites in the hope that they fully commit to providing managerial support (inclusive of lending) to small and medium-sized enterprises for the improvement of their business feasibility and productivity, without overly relying on collateral and personal guarantees.

・　the review on the application of the newly applied regulations;

・   the review on the implementation of key priority themes; and

・   the review by utilizing information from disclosure, media, and retail investors.

*The FSA has been publishing a series of reference casebooks of good practices on the disclosure of narrative information to encourage the disclosure of enhanced corporate narrative information that contributes to constructive dialogue between investors and corporations.

(1) Measures to mitigate cyber-risk

(2) Measures for early detection of cyber incidents, and

(3) Measures for appropriate response and recovery in the event of a cyber-incident.