Looking at the foreign currency denominated balance sheets of major Japanese banks, for approximately six months preceding last October, they actually increased their assets, including an increase of 33 billion U.S. dollars in overseas loans.4 On the liabilities side of the balance sheet, there was a decrease of 62 billion dollars in CP and CD issues, which was more than compensated for by an increase of 67 billion dollars in client-related deposits, reflecting banks' efforts to build up stable funding sources, and an increase of 26 billion dollars in repo funding.
In particular the volatility of oil revenues often leads to procyclical public spending which amplifies the business cycle and thus destabilises the macroeconomy. To avoid this, it is necessary to de-link public spending from contemporaneous oil revenue receipts, in a manner which is consistent with long term fiscal sustainability.