Business
Jun. 30, 2015
Developments in the Greek debt crisis and the Asian financial market
reaction so far have yet to alarm the Bank of Japan enough to consider
offering emergency liquidity, officials familiar with its thinking say.
If the deepening crisis triggers global market turmoil and risks
hurting Japan’s banking system, the BOJ’s first response would be to
offer massive, short-term funds in emergency market operations to calm
investors, they said on Monday.
Such action was taken in times of crises such as the global market
turmoil caused by the collapse of Lehman Brothers in 2008 and the
devastating earthquake that struck Japan in 2011.
“More time is needed to scrutinise the second-round effects” of the
developments in Greece, said one official on condition of anonymity.
While the BOJ is hardly complacent and is ready to inject liquidity
if market tensions heighten, it likely sees little need to act
immediately with Tokyo markets awash with funds due to its aggressive
monetary easing, they officials said.
Major central banks always share information on market developments
and have backstops in place in case the ripple effect of Greece turns
out to be worse than expected, the officials say.
The euro fell almost 2 percent and share prices tumbled across Asia
on Monday as Greece looked set to default on its debt repayment this
week, forcing Athens to impose capital controls to halt bank runs
