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Principal Terms and Conditions for Funds-Supplying Operations against Pooled Collateral


April 11, 2006

Revision:September 19, 2007
May 22, 2009
December 1, 2009
February 18, 2014
September 21, 2016
January 31, 2017
January 18, 2023

1. Purpose

These Terms and Conditions prescribe the principles for the Bank of Japan's funds-supplying operations against pooled collateral (loans that are made against pooled eligible collateral by way of open market operations), with the aim of facilitating money market operations.

2. Location of Operations

The Bank's Head Office (Operations Department) or its branches.

3. Eligible Counterparties

  1. (1) Eligible counterparties shall, pursuant to the Bank's relevant rules, be selected from financial institutions, etc. (as defined in Article 37, Paragraph 1 of the Bank of Japan Act [Act No. 89, 1997]) satisfying the eligibility criteria listed below.
    1. (a) To have a current account at the Bank.
    2. (b) To be deemed sufficiently creditworthy in light of its capital condition and other relevant information obtained through the Bank's on-site examinations and so forth.
  2. (2) In principle, the Bank shall review eligible counterparties annually.
  3. (3) If the Bank specifically deems it necessary in order to conduct money market operations smoothly, it can implement such measures as an exclusion of the institution in question from eligible counterparties.

4. Form of Loans

Loans shall be provided in the form of electronic lending.

5. Duration of Loans

The Bank shall determine the duration of each loan taking account of conditions in financial markets and the duration shall not exceed ten years.

6. Loan Rates

Interest rates shall be determined by one of the following methods.

  1. (1) Interest rates on the loans shall be determined by multiple-rate competitive auctions.
  2. (2) Interest rates on the loans shall be the Bank's target for the uncollateralized overnight call rate stipulated in the guideline for money market operations on the day of disbursement of the loan.

7. Date of Loan Disbursement, Amount of Loans, etc.

Taking account of conditions in financial markets, the Bank shall determine specifications necessary for lending, including the date of loan disbursement, the amount, and the counterparties for each loan.

8. Collateral

  1. (1) The Bank shall accept eligible collateral from counterparties in advance.
  2. (2) "Guidelines on Eligible Collateral" (Policy Board Decision on October 13, 2000) and "Collateral Guidelines on Eligible Foreign Bonds" (Policy Board Decision on May 22, 2009) shall apply to the collateral for the loans.