Ikko Nakatsuka, Japan’s new financial services minister, urged the country’s bank lobby to determine whether its process for setting the benchmark yen lending rate should be revamped.
The Japanese Bankers Association should identify what improvements, if any, need to be made to guidelines for submissions used to set the Tokyo Interbank Offered Rate, Nakatsuka told a group reporters in Tokyo today.
Comments from the minister, who was appointed Oct. 1 in a Cabinet reshuffle by Prime Minister Yoshihiko Noda, come as the U.K. looks to reform governance and management related to setting the London Interbank Offered Rate following a Libor manipulation scandal there.
Yasuhiro Sato, who heads the lobby group, said July 19 his association completed a month-long review of member banks to ensure they follow its guidelines. No issues related to its framework for setting Tibor were found, he said.
In Japan, reference banks including the lending units of Mitsubishi UFJ Financial Group Inc. (8306) are responsible for submitting interbank offered rates to the association, which compiles them and sets the benchmark, according to the group’s website.
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