Japan considers lowering deposit insurance rate for top banks - Nikkei
TOKYO, Aug 27 (Reuters) - Japan is looking to lower the deposit insurance rate for leading banks in a move to drive further consolidation among regional lenders as they struggle with a shrinking population and ultra-easy monetary policy, the Nikkei reported on Tuesday.
The Financial Services Agency (FSA), Japan's financial watchdog, is expected to announce the change this week and plans to implement the new policy as early as fiscal 2021, according to the Nikkei report.
The FSA declined to comment on the report.
All domestic financial institutions are currently required to reserve a deposit insurance fee of 0.033% to hedge against bankruptcy. With the change, the FSA would require different rates depending on a bank's financial health, measured by factors such as the size of its core capital.
Years of near-zero interest rates have made traditional banking barely profitable in Japan, prompting dozens of regional banks to form partnerships and consolidate.
(Reporting by Takashi Umekawa, Editing by Chang-Ran Kim and Sherry Jacob-Phillips)