Mitsubishi UFJ Financial Group (MUFG) will closely monitor liquidity when issuing new loans, an executive stated, as Japanese banks gear up to support projects under the nation's $550 billion U.S. investment package.
Japanese financial institutions are anticipated to join the initiative, with backing from state-owned agencies Japan Bank for International Cooperation (JBIC) and Nippon Export and Investment Insurance (NEXI), providing equity, loans, and guarantees.
"We must be vigilant," MUFG Chief Financial Officer Jun Togawa told Reuters. "A sharp and sudden rise in long-term loans would be challenging from an NSFR perspective," he noted, referencing the Basel III Net Stable Funding Ratio.
The NSFR mandates banks to secure stable funding, like capital or long-term liabilities, to balance illiquid or long-term assets. This is part of international regulatory reforms established after the 2008 financial crisis.
Discussions are ongoing for several deals, with potential announcements expected during Japanese Prime Minister Sanae Takaichi's upcoming visit to meet U.S. President Donald Trump, sources reported.