Government measures in key jurisdictions 5th edition - Flipbook - Page 82
Japan
On 8 May 2020 the FSA addressed the issue of property tenant SMEs and individuals facing
difficulties in paying rents and property related- business operators (e.g., hotels and other
accommodation service providers, leisure facility businesses, owners of buildings for rent, etc.)
facing cash-flow problems due to a decline in their incomes, by:
a) requesting lender financial institutions to support the cash-flow of borrowers who
are such tenants or property related-business operators by:
– promptly and flexibly implementing new or bridge loans, reducing principal and/or
interest payments or rescheduling repayment terms of existing loans,
– ensuring such implementation above especially where the borrowers are landlords who
have granted their tenants rent reductions or rescheduled rent payment terms, and
– considering not charging fees or penalties for changing terms of existing loans.
b) requesting managers of REITs (real estate investment trusts and investment
corporations) to take flexible measures such as rent reductions or rescheduling rent
payment terms with tenants of properties under their management.
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On 27 May 2020 the FSA addressed the importance of private sector financial
institutions’ loans (other than those guaranteed by public credit guarantee
associations) for supporting borrowers’ cash-flow, requesting lenders to make utmost
efforts to further ensure prompt and proper support measures for borrowers, such as
deferment of principal payments or relaxation of other loan conditions and provision of
new loans. The FSA also published the following matters to note:
(i) if a financial institution had evaluated a borrower as being financially sound before
the pandemic, and the borrower is now facing a deterioration of business
conditions due to the pandemic, and the financial institution has now nevertheless
decided to maintain the evaluation as before in consideration of the likelihood of
their post-corona recovery and effects of the emergency economic package, the
FSA will respect such decisions made by the financial institution.
(ii) the FSA and Local Finance Bureaus will monitor the balances of private financial
institutions’ loans (other than those guaranteed by public credit guarantee
associations) and conduct hearings concerning the status of their support of
borrowers’ cash-flow to check whether loan balances are decreasing or not.
(iii) active use of borrowings recognisable as capital (borrowed money that is deemed
to have the nature of capital through the evaluation of borrowers and that can be
treated as capital) is recommended and the FSA will clarify this in its Guidelines for
Supervision.
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Regarding (v) above, on 27 May 2020 the FSA requested financial institutions to
support borrowers by:
(i) actively offering support to customers by deferring principal payments for a
sufficient period of time or otherwise modifying loan conditions promptly
depending on customers’ needs, and refraining from charging fees for modification
of loan conditions;
(ii) putting in place telephone services dedicated for home loans or establishing
consultation offices both to be available even on holidays and to disseminate
information on such services broadly to help customers use them more easily;
(iii) responding to customers’ concerns on other personal loans and flexibly modify
loan conditions based on customers’ needs.
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On 10 June 2020 the FSA requested financial institutions to support borrowers by:
(i) responding appropriately to requests from borrowers as those who have already
been provided with loans may want additional loans due to the prolonged impact
of Covid-19,
Government measures in key jurisdictions
