Regulatory Alerts2021-06-30
JFSA’s Approaches to Prudential Supervision
The Financial Services Agency (JFSA) published this Discussion Paper in March 2019, outlining its new approaches to prudential supervision, moving from a checklist-based, backward-looking compliance model to a substantive, forward-looking, and holistic assessment. This shift emphasizes ex-ante crisis prevention, comprehensive evaluation of financial institutions' safety and soundness, and proactive identification and mitigation of financial system vulnerabilities. The JFSA aims to foster an environment where financial institutions can develop sustainable business models through appropriate risk-taking, rather than merely avoiding risks, by repealing its Inspection Manuals and promoting dialogue.
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