Non-banks may amplify risks from policy divergence, Nakaso warns
Funding could dry up suddenly in times of crisis, says deputy
Non-banks have the potential to supply additional dollar funding when bank balance sheets are constrained, but may also worsen funding shortages during times of stress, Bank of Japan (BoJ) deputy governor Hiroshi Nakaso warned today (January 20).
It is the responsibility of central banks to ensure their actions do not destabilise the global financial system, the deputy governor told a meeting of the International Bankers Association of Japan. With this in mind, the BoJ has started stress testing
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