Resources for Basel II Capital Accord (Basel II)

Japan may curb banks' appetite for subprime risk

www.guardian.co.uk

Japan may cut the amount of high-risk investments that banks can include when calculating core equity capital, the financial services minister said on Tuesday, a sign that regulators may seek curbs on risky subprime products.
Tokyo is currently mulling caps on the amount of securitised products that can count towards the measure of a bank's capital adequacy, the minister, Yoshimi Watanabe, told reporters.
A limit would likely weigh on lenders' appetite for riskier products, such as the subprime investments that have so far cost Japan's large banks about $910 million.
"We've been brainstorming," Watanabe told a regular news conference. "It is not as if something has been decided."

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