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Recent Efforts for Developing the ABCP Market: Improving Financing Conditions for Small to Medium-sized Enterprises and Exploiting Opportunities for Securitization

June 20, 2002
Tokiko Shimizu
Yasunari Inamura
Kenji Nishizaki

The views expressed in the Review are those of the authors and do not necessarily represent the views of the Bank of Japan. Comments and questions as well as requests for hard copies should be addressed to Tokiko Shimizu, Manager, Financial Markets Department (tokiko.shimizu@boj.or.jp).

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One of the most important agendas for the revival of the Japanese economy is to improve direct financing channels for firms. Over the past few months, financial experts were invited to a "Study Group on the Securitization of Small to Medium-sized Enterprises' Receivables," held at the Financial Markets Department, Bank of Japan. This Group examined issues to be tackled in order to develop the Japanese ABCP (Asset-Backed Commercial Paper) market, so as to enable small to medium-sized enterprises, which have traditionally been highly dependent on bank loans, to increase direct financing from markets by utilizing securitization techniques. This Study Group identified three priorities in developing the ABCP market: i) responding to legal issues arising from the assignment of receivables, ii) standardizing procedures for the assignment of receivables, and iii) improving databases on small to medium-sized enterprises. The Bank of Japan will continue to pay attention to the development of the ABCP market and to support their efforts towards market infrastructure improvements.