The objective of monetary easing is to push down the entire yield curve; therefore, a negative interest rate will be a very powerful “weapon” for monetary easing. In combination with the continuation of large-scale purchases of JGBs, a negative interest rate will exert downward pressure on interest rates across the entire yield curve more powerfully.
And we have pressed the banks to develop a broader range of techniques to deal with loans in arrears, particularly unsustainable mortgages, such as loan modification arrangements like split mortgages. Our assessment of the banks’ operational capacity for arrears handling over a year ago showed significant weaknesses.