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Amendments to "Principal Terms and Conditions for Complementary Lending Facility"

(For immediate release)

June 28, 2001
Bank of Japan

At the Monetary Policy Meeting held today, the Policy Board of the Bank of Japan decided to amend"Principal Terms and Conditions for Complementary Lending Facility" (Policy Board Decision on February 28, 2001) as shown in the Attachment with a view to facilitating monetary operations. The objectives of the amendments are to change the form of lending under the Complementary Lending Facility from a loan on bill to an electronic loan (a loan through an electronic lending facility), and to accept its collateral as part of the Bank's pooled collateral that have been used for the Bank's other credits such as bill purchasing operations.

Attachment

Amendments to "Principal Terms and Conditions for Complementary Lending Facility"

  • Paragraph 2 (1) shall be amended as below.
    1. (1) Counterparties should satisfy all the eligibility criteria as below.
      1. (a) (No change)
      2. (b) To have concluded loans-on-bills agreements for electronic loans with the Bank
      3. (c) (No change)
  • Paragraph 7 (1) shall be amended as below.
    1. (1) Counterparties shall submit The Bank shall accept in advance eligible collateral to the Bank from counterparties.
  • Paragraph 8 (2) shall be amended as below.
    1. (2) Loans shall be provided in the form of electronic lending on bills.
  • Supplementary Provision (3) shall be repealed.

(Supplementary Provisions)

  1. (1) These amendments shall become effective on a day designated by the Governor, which would be no later than the end of December, 2001 (hereinafter the starting day).
  2. (2) Financial institutions, which will have been approved as counterparties under the current Complementary Lending Facility on the business day before the starting day, and will have concluded agreements for electronic loans with the Bank by the starting day, shall be deemed to be approved as counterparties on the starting day under the amended Principal Terms and Conditions for Complementary Lending Facility.
  3. (3) Notwithstanding paragraph 2(2) of the Principal Terms and Conditions for Complementary Lending Facility, the first review of the approvals regarding counterparties under the above supplementary provision (2) shall be conducted around August 2002.
  4. (4) Even after the starting day, loans on bills extended under the Principal Terms and Conditions for Complementary Lending Facility before the starting day shall continue to be dealt with in the pre-amended framework.