What the Bank did first after the earthquake was to do everything possible to ensure the safety and security of the financial infrastructures. When there is high uncertainty over the future of the economy, one of the most paramount challenges is steadfastly to maintain financial infrastructures to prevent rising concern among the people. With this in mind, the Bank has been doing its utmost to maintain the functioning of the financial and settlement systems, which are the critical infrastructures that support people’s lives, as well as striving to ensure financial market stability.

On March 11, the day the earthquake occurred, the Bank, jointly with the Financial Services Agency, asked financial institutions to take appropriate measures to accommodate the needs of those affected by the disaster, such as permitting the withdrawal of deposits even in cases where depositors had lost passbooks and seals. In addition, the Bank’s Head Office and other branches also continue to provide central bank services, such as exchanging banknotes and coins that were damaged by the earthquake.

As for wholesale payments and settlements for funds and securities, Japan’s major payment and settlement systems, including the Bank of Japan Financial Network System, or BOJ-NET – the core settlement system for funds and Japanese government bonds – have, thanks to the efforts of the related parties, been operating as usual for the entire time since the earthquake occurred, despite various difficulties in the aftermath.

Ensuring the stability of financial markets

To ensure financial market stability, the Bank has been providing ample liquidity after the earthquake. When the economy is faced with a major crisis and there is heightened uncertainty about the future, participants in the financial markets attempt to retain a large amount of funds at hand. If they fail to obtain sufficient funds, financial markets could destabilise due to heightened uncertainty, which could eventually adversely affect economic activity. To prevent such a situation, the Bank has been providing ample liquidity since immediately after the earthquake, striving to ensure financial market stability by maintaining a sense of security on the funding front, and trying to avoid adverse effects on corporate activity and people’s daily lives from the financial side.

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