The new rules – many of which have not been implemented yet – start to bite already, due to the tightening of capital requirements and a more homogeneous regulatory framework which pose challenges in particular to smaller financial centers. But this changing environment implies also opportunities to improve their relative positions.
In fact, the BOJ recently requested that it be allowed to retain 15 percent (rather than 5 percent) of the surplus for the 2002 fiscal year that just ended to increase its capital, and the Ministry of Finance has indicated that it will  4  BIS Review 25/2003  approve the request.