Bank of Japan : Minutes of the Monetary Policy Meeting on May 22, 2020

Not to be released until 8:50 a.m. Japan Standard Time on Friday, June 19, 2020.

June 19, 2020

Bank of Japan

Minutes of the Monetary Policy Meeting on May 22, 2020

(English translation prepared by the Bank's staff based on the Japanese original)Please contact the Bank of Japan at the address below in advance to request permission when reproducing or copying the content of this document for commercial purposes.

Secretariat of the Policy Board, Bank of Japan

P.O. Box 30, Nihonbashi, Tokyo 103-8660, Japan

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A Monetary Policy Meeting of the Bank of Japan Policy Board was held in the Head Office of the Bank of Japan in Tokyo on Friday, May 22, 2020, from 9:00 a.m. to 9:54 a.m.1

Policy Board Members Present

Mr. KURODA Haruhiko, Chairman, Governor of the Bank of Japan

Mr. AMAMIYA Masayoshi, Deputy Governor of the Bank of Japan

Mr. WAKATABE Masazumi, Deputy Governor of the Bank of Japan

Mr. FUNO Yukitoshi

Mr. SAKURAI Makoto

Ms. MASAI Takako

Mr. SUZUKI Hitoshi

Mr. KATAOKA Goushi

Mr. ADACHI Seiji

Government Representatives Present

Mr. KANDA Masato, Deputy Vice-Minister for Policy Planning and Coordination,

Ministry of Finance

Mr. MIYASHITA Ichiro, State Minister of Cabinet Office, Cabinet Office

Reporting Staff

Mr. UCHIDA Shinichi, Executive Director

Mr. KATO Takeshi, Director-General, Monetary Affairs Department

Mr. FUJITA Kenji, Deputy Director-General, Monetary Affairs Department

Secretariat of the Monetary Policy Meeting

Mr. MATSUSHITA Ken, Director-General, Secretariat of the Policy Board

1 The minutes of this meeting were approved by the Policy Board at the Monetary Policy Meeting held on June 15 and 16, 2020, as "a document describing an outline of the discussion at the meeting" stipulated in Article 20, paragraph 1 of the Bank of Japan Act of 1997. Those present are referred to by their titles at the time of the meeting.

Mr. HONDA Hisashi, Director, Deputy Head of Planning and Coordination Division, Secretariat of the Policy Board

Mr. YAMASHIRO Yoshimichi, Director, Deputy Head of Planning and Coordination

Division, Secretariat of the Policy Board

Mr. IIJIMA Kota, Head of Policy Planning Division, Monetary Affairs Department

Mr. YANO Masayasu, Head of Policy Infrastructure Division, Monetary Affairs

Department

Mr. NAGANO Teppei, Senior Economist, Monetary Affairs Department

Mr. TSUCHIKAWA Akira, Director, Deputy Head of Policy Infrastructure Division,

Monetary Affairs Department

Mr. SHIMIZU Seiichi, Director-General, Financial Markets Department

I. Remarks on the Purpose of This Unscheduled Monetary Policy Meeting

The chairman first provided the following explanation for calling an unscheduled

Monetary Policy Meeting for today.

• (1) At the Monetary Policy Meeting held on April 27, 2020, with the aim of further supporting financing mainly of small and medium-sized firms, the chairman instructed the staff to swiftly consider a new measure to provide funds to financial institutions, taking account, for example, of the government's programs to support financing, such as those in its emergency economic measures, and report back at a later Monetary Policy

  Meeting.

• (2) In accordance with Article 17, paragraph 3 of the Bank of Japan Act, the chairman had decided to call an unscheduled Monetary Policy Meeting for today to receive the staff's report and discuss monetary control matters based on it.

II. Staff Proposal regarding a New Fund-Provisioning Measure and Related Measures

The Bank's staff reported the result of deliberations on a new fund-provisioning measure, which were conducted in response to the instruction by the chairman at the Monetary Policy Meeting held on April 27, 2020, as follows. Under this measure, the Bank could provide funds to eligible counterparties against pooled collateral for up to 1 year at the loan rate of 0 percent with the maximum amounts outstanding of eligible loans reported by those counterparties, twice as much as the amounts outstanding of the loans could be included in the Macro Add-on Balances in current accounts held by financial institutions at the Bank, and a positive interest rate of 0.1 percent could be applied to the outstanding balances of current accounts held by financial institutions at the Bank corresponding to the amounts outstanding of loans provided through this measure. Eligible loans could be (1)

interest-free and unsecured loans based on the government's emergency economic measures and loans guaranteed by the credit guarantee corporations in response to the novel coronavirus (COVID-19) (loans based on the government's programs), and (2) loans equivalent to (1) in terms of loan conditions. The amount outstanding of eligible loans could be about 30 trillion yen. Member financial institutions of central organizations of financial cooperatives could also be included as eligible counterparties, and this measure and the

Special Funds-Supplying Operations to Facilitate Financing in Response to the Novel Coronavirus (COVID-19) (Special Operations) could be conducted in an integrated manner.