Review of the Conditions regarding the Purchase of Asset-Backed Securities

December 16, 2003
Bank of Japan

The development of asset-backed securities (ABS) market contributes to sustainable economic growth through the improvement of financial intermediary function as well as to the permeation of the effects of monetary easing through the economy.Based on such recognition and with a view to promoting its long-term development, the Bank of Japan has been supporting various efforts of market participants to improve the infrastructure of the ABS market.

The purchase of ABSs by the Bank is part of such support.When the scheme for the purchase was introduced, the Bank expressed that it was prepared to review the conditions regarding the purchase of ABSs with due consideration to the sound development of the ABS market and the financial soundness of the Bank.At the Monetary Policy Meeting held on December 15 and 16, the Bank staff briefed Policy Board members on the ABS market situation and the actual purchase of ABSs by the Bank as well as the opinions of market participants expressed at a workshop on securitization hosted by the Bank.At the Meeting, views were expressed that it should be desirable to review whether or not the conditions regarding the purchase of ABSs be modified based on the evaluation of actual purchasing operations so far.

The Chairman instructed the Bank staff to review the conditions regarding the purchase of ABSs and report the result at the next Monetary Policy Meeting.