Japanese banks have sufficient capital bases to perform financial intermediation activities appropriately, even amid the global tightening of financial conditions.

Despite heightened uncertainty about the financial sector in the united states and Europe, triggered by u.s. bank failures in March, japan’s financial system has been sound and resilient.

Vigilance against tail risks continues to be warranted.

Future developments remain highly uncertain as financial and capital markets have been nervous.

Quality of banks' domestic and foreign loan portfolios has remained high on the whole, some loans entail high credit risk.

Need to examine the risks of contraction and overheating in the financial system and address potential vulnerabilities appropriately in order to ensure the stability of Japan's financial system.