Nor should we require individual banks to hold capital in amounts sufficient to fully protect against those rare systemic events which, in any event, may render standard probability evaluation moot. The management of systemic risk is properly the job of the central banks. Individual banks should not be required to hold capital against the possibility of overall financial breakdown.
These consist of three monetary easing measures, namely, (1) the Special Program to Support Financing in Response to the Novel Coronavirus (COVID-19) (the Special Program), (2) an ample provision of yen and foreign currency funds, and (3) active purchases of exchange-traded funds (ETFs) and Japan real estate investment trusts (J-REITs) (Chart 7). I will next explain each of these measures.