Financial institutions are expected to play their part by actively supporting firms’ vigorous efforts through their function as financial intermediaries. Meanwhile, the government needs to provide an environment that makes such efforts by private economic entities possible. It is necessary to constantly examine whether there are institutional factors that put Japanese firms at a disadvantage in global competition.
These are hard decisions which we, as a regulator, have taken with a view to capturing the true level of underlying risk knowing fully well that this might cast a burden on the banks in India.