Centralising transactions should reduce counterparty risk and allow a better monitoring of financial flows, especially of derivatives, for which little data is available in general. The extra information should be useful for calibrating monetary policy.
However, Japanese financial institutions have become more cautious in extending loans, facing up severe fund-raising environments and deteriorating business conditions of borrower companies. While especially large firms are steadily increasing the issuance of commercial paper and corporate bonds, small and medium-sized firms and relatively low-rated ones continue to face difficult conditions for fund-raising in capital markets.