Amid these developments, private banks’ lending continues to decline by about 2-3 percent on a yearon-year basis. The year-on-year growth rate of the amount outstanding of corporate bonds issued is decreasing. The year-on-year growth rate of the amount outstanding of CP issued has slowed, although the amount is still above the previous year’s level.
Recently, financial institutions have steadily increased their capital, as they have continued to raise equity capital and accumulate retained earnings. The amount of risks has decreased moderately, especially credit risk and risk associated with stockholdings. Credit risk has declined because the growth in lending has been slow, reflecting prolonged deflation and sluggish economic activity, and corporate bankruptcies have remained at a low level.