In the case of the Bank of Japan, when it decided to embark on a program of purchasing corporate financing instruments in 2009, the Japanese government noted at the Monetary Policy Meeting that it intended to consult with the Bank of Japan in the context of closing its books at the end of accounting periods if the risks had materialized.
The financial trilemma and cooperation among central banks With regard to the stability of the financial system under deepening globalization, an important perspective is provided by Schoenmaker: the “financial trilemma” (Chart 5).2 That view holds that it is impossible to simultaneously achieve financial stability, financial integration (capital mobility), and national financial policy. Let me apply this framework to the LLR function.