June 28, 2001
Bank of Japan

• With a view to facilitating monetary operations through enhanced convenience for counterparties, the Bank of Japan decided to reform the Complementary Lending Facility introduced in March 2001 as follows.

Collateral for the Complementary Lending Facility will be merged with pooled collateral which have been used for bill purchasing operations, daylight overdrafts, and the security of treasury fund operations. The form of lending under the reformed Facility will be an electronic loan, a new form of lending extended through BOJ-NET without a bill or a deed accepted.

--	The Bank will make preparations to implement these measures in the middle of December, 2001. Please see the attachment for the outline of the reformed Complementary Lending Facility.

--	Prior to effecting the above measures, the Bank will extend the regular deadline for an application for the Facility from 4:00 p.m. to 4:30 p.m. from July 13 on.

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(Attachment)

Outline of the reformed Complementary Lending Facility

	Present	After the reform	Improvements
Form of lending	Loans on bills	Electronic loans In the event that lending through BOJ-NET is not possible due to problems such as computer system troubles, loans on bills can be extended.	Swift and more efficient procedure
Collateral	Collateral pledged in advance for BOJ lending (Only bonds and loans on deeds are acceptable)	Pooled collateral commonly used for bill purchasing operations, daylight overdrafts, Complementary Lending Facility, and the security of the treasury fund operations	More efficient use of collateral Bills also acceptable
Deadline for applications	4:00p.m.(*)	4:45 p.m.(*)	Later deadline by virtue of computerized procedure -- Prior to the introduction of electronic loans, the Bank will extend the deadline for applications from 4:00 p.m. to 4:30 p.m. (*) from July 13 on.
Extension of loans	Simultaneous settlement(**) at 5:00 p.m.	Real-time settlement (time-zone currently planned is roughly between 4:00 p.m. and 5:00 p.m.)	More flexibility in extending loans
Repayment	Simultaneous settlement(**) at 5:00 p.m. on the next business day	Simultaneous settlement(**) at 9:00 a.m. on the next business day In the event that an outstanding balance of the current account is insufficient for the repayment of the loan, it shall be repaid through daylight overdrafts.	Collateral will be released on the repayment and made available for other transactions on the same day.

(*)	On a day when an operating time of BOJ-NET for settlement of funds is extended, the closing time for a request will also be extended by the same amount of time as the extension of operating hours of BOJ-NET.
(**)	Simultaneous settlement is a form of net settlement whereby individual participants' payments to and receipts from the Bank are netted out on a bilateral basis between the Bank and that participant, and the resulting net settlement positions of participants are credited and debited on their BOJ accounts simultaneously at designated times.