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.
Even with this additional cushion, however, concerns on the part of the BOJ about its balance sheet are likely to remain. The public debate over the BOJ's capital should not distract us from the underlying economics of the situation. In particular, the private shareholders notwithstanding, the Bank of Japan is not a private commercial bank.