Second, despite the current low interest rate environment, the profits of both major banks and regional banks are close to record levels, mainly reflecting the significant decline in credit costs due to the steady economic recovery. And third, when the Bank introduced the negative interest rate policy, it designed the policy so as not to excessively squeeze banks’ profits.
Specifically, the Bank designed the policy framework such that a negative interest rate is applied only on the margin by dividing the current account balances that financial institutions hold at the Bank into three tiers.