Japan Regulator Warns Banks About China Risks

Japan's financial regulator has warned top domestic banks about China risks and whether they have plans in place if Sino-Western tensions worsen, Takaya Yamaguchi, Makiko Yamazaki and Paritosh Bansal reported for Reuters.

Photo Insert: The Financial Services Agency's (FSA) request is to ensure Japan's megabanks are thinking about the risks and are prepared to respond if the geopolitical situation worsens, including over the issue of Taiwan's political status.

The Financial Services Agency's (FSA) request, which has not been previously reported, is to ensure Japan's megabanks are thinking about the risks and are prepared to respond if the geopolitical situation worsens, including over the issue of Taiwan's political status, said three of the sources.

Japanese megabanks Mitsubishi UFJ Financial Group (MUFG), Sumitomo Mitsui Financial Group (SMFG) and Mizuho Financial Group have a combined $6.5 trillion in assets, according to Refinitiv.

As of end-March, the three banks had total credit exposure of about $64 billion to China, or roughly 1% of their total assets, according to their financial statements. The number does not include all business units of the banks.

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