QuestionWhat are on-site examinations?
The Bank conducts on-site examinations and off-site monitoring to grasp the business activities and financial conditions of financial institutions that conduct transactions with the Bank through the current accounts they hold at the Bank. In its conduct of on-site examinations, the Bank thoroughly assesses the financial institutions' business operations and risk management frameworks by visiting their premises.
Based on the results of its on-site examinations, the Bank, as necessary, advises the financial institutions to improve their business operations and risk management frameworks.
Article 44 of the Bank of Japan Act stipulates that the Bank may, for the purpose of appropriately conducting business to ensure financial system stability, conclude a contract with financial institutions concerning on-site examinations. In accordance with this Article, the Bank concludes contracts with the relevant financial institutions and carries out on-site examinations.