International Monetary Fund. Monetary and Capital Markets Department
INTERNATIONAL MONETARY FUND
Banking regulations and supervisory processes have undergone significant improvements since the last Financial Sector Assessment Program (FSAP). The Japan Financial Services Agency (JFSA) is in the process of reforming its supervisory practices and has been shifting its focus from assessing compliance with prudential requirements to a more sophisticated and forward-looking risk-based approach to supervising banks and bank holding companies. Its prudential requirements have also continued to evolve in line with international trends. Capital, liquidity and disclosure requirements have been updated to incorporate the Basel III reforms agreed by the Basel Committee in accordance with the internationally agreed timelines. Corporate governance expectations have also been strengthened with the implementation of Japan's Stewardship Code and Corporate Governance Code designed to strengthen corporate governance in the corporate and financial sectors. Japanese agencies have also deepened their working relationships among themselves and with their foreign counterparts.