First, Japan’s financial institutions have a sufficient capital buffer and remain very sound, since they were not severely affected by the subprime mortgage problems in the United States and the global financial crisis. Second, even though their net interest income has fallen, the profits of financial institutions in Japan have remained high due mainly to lower credit costs reflecting Japan’s economic recovery.
Better incorporation of cyber risk into financial stability analysis will improve the ability to understand and mitigate system-wide risk. ii. Secondly, a minimum common framework for cybersecurity needs to be devised that outlines best practices and standards for financial institutions to follow. This can help ensure that all institutions are taking the necessary steps to protect themselves from cyber threats. iii.