Japan’s Negative Rate Experiment: The Biggest Losers

Japan’s Negative Rate Experiment: The Biggest Losers Last week the Bank of Japan published detailed estimates of the distribution of Japan’s banks’ reserves under the new three-tier system. The figures show that this interest rate regime imposes a disproportionately heavy burden on foreign banks and Japan Post Bank. Whether or not this was an intended consequence of the policy remains to be seen, but as Deutsche Bank points out, in a research note issued to clients at the end of last week, it may be advantageous for the BoJ that foreign banks bear the brunt of the policy. Foreign banks…