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Japan's local government debt control system
[journal article]
Abstract Japanese local government bonds or loans are viewed as secure and almost the same as Japanese Government Bonds (JGBs). The Ministry of Internal Affairs and Communications (MIC), which is responsible for matters related to local government finance in Japan, states that even though decentralization re... view more
Japanese local government bonds or loans are viewed as secure and almost the same as Japanese Government Bonds (JGBs). The Ministry of Internal Affairs and Communications (MIC), which is responsible for matters related to local government finance in Japan, states that even though decentralization reforms have been executed and are still in progress, there are three reasons that assure the financial security of local governments. First, the central government provides them with solid support for necessary resources. Second, the MIC checks and controls local governments’ bond issuance or loan borrowing based on the "Consultation System". Third, the control system of the fiscal soundness of local governments is effective. In fact, the Bank for International Settlements (BIS) risk weight for yen-based Japanese local government bonds is as low as JGBs, which is 0% in the standardized approach.... view less
Keywords
Japan; credit; credit policy; government; fiscal policy; national debt
Classification
Economic Policy
Document language
English
Publication Year
2018
Page/Pages
5 p.
Journal
IndraStra Global (2018) 7
Issue topic
Debt
ISSN
2381-3652
Status
Published Version; peer reviewed
Licence
Creative Commons - Attribution-Noncommercial-No Derivative Works 4.0