Banks’ stability is also founded on appropriate risk management and control systems: organizational shortcomings prevent the correct allocation of capital, encourage the unwitting assumption of risks, render the institution vulnerable to violations of internal norms and procedures, and expose intermediaries to potentially severe reputational damage.
Particularly in the case of Japan, firms -- ranging from large firms to small and medium-sized as well as micro firms -- suffered a rapid worsening of business conditions due to the spread of COVID-19, which happened to coincide with the end of their accounting period at end-March.