These measures to facilitate corporate financing, while they have been introduced as necessary measures in view of financial and economic conditions in Japan, are highly exceptional for a central bank. Outright purchases CP and corporate bonds inevitably involve the Bank taking on credit risks of individual firms.
They may, therefore, exert negative effects on the Bank's balance sheet, which forms the basis for confidence in the money the Bank provides. In addition, if the Bank should intervene excessively in a particular market, there is a concern that it might distort market functioning, whereby funds are efficiently allocated, due to excessive concentration of transactions in particular issues purchased by the Bank.