Japan's Financial Services Agency will review whether domestic financial
institutions are adequately assessing credit risks from lending to overseas
non-bank lenders and real estate companies. The initiative will be included in
the FSA's draft annual strategic priorities, to be finalised in June next year.
The move responds to expanding overseas non-bank lending by major Japanese
banks—non-bank financial intermediaries are increasing global activity and
drawing more funding from Japanese banks—and to rising residential prices in
major metropolitan areas that have prompted regional lenders to boost
property-related loans. The FSA will also focus on investment and lending
policies, project due diligence and risk management for data centers and similar
facilities.
