Flash Note 11/05/2016 Japan - Passerine birds, divorces and bad

Flash Note
Alex Fusté
[email protected]
Japan - Passerine birds, divorces and bad omens
I sometimes believe that I know as much on financial markets
as on Passerine birds and its migratory patterns. Why? Because
of the simple reason that I'm increasingly unable to provide a
rational explanation to certain decisions.
For example, In Japan, the Financial Services Agency (FSA) is
examining right now ways to allow banks to implement its own
and independent stress test. Crystal clear, instead of imposing
uniform standards comparable to overseas peers, the FSA is
examining how to allow Japanese banks to develop its own
stress test!!!!
Well, I can not find a compelling answer in the line that this
decision will provide a more solid and sustainable path for the
banking sector and the economy. Instead, what I suspect is that
the authorities are giving up some ground for the harmful
effects of its NIRP on bank's results.
From an investor perspective (and like you, I am one), the news
coming from Japan's regulators are not reassuring. Managing a
banking crisis by giving more freedom to banks is like letting
your wife to be your lawyer in your own divorce.
If materialized, this would come as a Bad omen for Japan.
Kind regards,
Alex Fusté
Chief Economist
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