Japan Cracks Down on Big Banks' Overseas Operations

Japan's Financial Services Agency (FSA) is planning to step up monitoring of overseas operations at major financial institutions, according to a draft of its annual financial administration policy. The move reflects difficulties in grasping the overall operations of large financial groups as they expand internationally.

The FSA will analyze how such banks' overseas operations could affect their management in unforeseen circumstances, including global market turmoil like the 2008 financial crisis and a rapid economic downturn.

Recently, large banking groups have become more active in overseas mergers and acquisitions. In April, Mitsubishi UFJ Financial Group Inc. invested about 680 billion yen ($4.3 billion) in a major Indian nonbank lender.