Partial Revisions to Climate-Change and Related Funding Guidelines
Overview
At its Policy Board and Monetary Policy Meeting on September 17 and 18, 2026, the Bank of Japan decided to partially revise four basic guidelines and related rules for funding operations concerning climate change responses, member financial institutions of central institutions, financial institutions in disaster-affected areas, and common collateral, in order to ensure the smooth conduct of monetary control. The revisions change lending rates, lending limits, eligible disasters, implementation dates, and other provisions.
Key points
- The Bank of Japan decided to partially revise four funding operation guidelines and related rules.
- The total lending limit for climate-change responses will be 50 trillion yen, with a limit of 10 trillion yen for each borrower.
- For financial institutions in disaster-affected areas, the lending limit for the Great East Japan Earthquake will be 1 trillion yen.
- The partial revisions will generally take effect on September 18, 2026, while some provisions will take effect on May 31, 2027.
Overview
At its Policy Board and Monetary Policy Meeting on September 17 and 18, 2026, the Bank of Japan decided to partially revise basic guidelines and related rules for four funding operations to ensure the smooth conduct of monetary control. The revisions concern climate-change responses, use by member financial institutions of central institutions, support for financial institutions in disaster-affected areas, and funding operations against common collateral.
Impact
The revisions are being made to ensure the smooth conduct of monetary control. Funding for financial institutions in disaster-affected areas will be provided to support initial responses to funding needs expected to arise in future recovery and reconstruction efforts.
Details
For climate-change responses, the lending rate will be set at the average rate applicable under the Complementary Deposit Facility during the lending period. The total lending limit will be 50 trillion yen, and the limit for each borrower will be no more than 10 trillion yen, based on the equivalent amount of eligible investments and loans with remaining maturities of at least one year. A limit for member financial institutions of central institutions will likewise be established based on the equivalent amount of eligible investments and loans reported.
For financial institutions in disaster-affected areas, the eligible disaster will be the Great East Japan Earthquake, the lending rate will be changed to an average-rate method, and the lending limit will be 1 trillion yen. Sections 1, 7, and the supplementary provisions will take effect on September 18, 2026, while Sections 2 and 9 will take effect on May 31, 2027.
For funding operations against common collateral, two methods not involving an auction will be established: a fixed-rate method determined by taking into account prevailing market prices for Japanese government bonds and other factors, and a variable-rate method based on the average rate applicable under the Complementary Deposit Facility during the lending period.