Stockholdings by Japan's banks have been a factor undermining their profits. Along with the holding of particular firms' stocks, banks have extended a large amount of loans to those firms. Banks would suffer losses on both loans and stocks if such firms defaulted. Moreover, banks have increased...

Over-the-counter (OTC) derivative transactions, like loans, present the risk of losses in the event that the counterparty goes bankrupt. This is referred to as counterparty risk. OTC derivatives differ from loans, however, in that exposure varies with market factors. The risk that both exposure...

Japanese life insurance companies hold a large amount of Japanese government bonds (JGBs) as long-term investments. Recently, their holdings of super-long-term JGBs have been increasing especially significantly, and the presence of life insurance companies in the super-long-term JGB market has...

As international ties have been strengthened on the real economic front, global correlation has been higher in the government bond and other financial markets. Under the circumstances, Japanese banks' market risk associated with holdings of Japanese government bonds (JGBs) has been more...