Protecting market stability in the event of severe stress cannot be a task left solely to the ex post intervention of central banks: not only in light of the well-known moral hazard problems, but also because of the risk of causing tension between the needs of market stabilisation and the primary objective of monetary policy, i.e. price stability.
Financial institutions eligible for loans under this facility include foreign branches of domestic financial institutions and both their yen-denominated and foreign currency-denominated lending can be covered. This reflects the view that the growth potential of financial institutions and firms is closely linked to their overseas activities in this globalization era and that their enhanced competitiveness would indirectly boost the growth of the Japanese economy.