Portfolio Rebalancing and Financial Performance of Banks in Japan since Quantitative Easing-2: Exploring Impacts of Post-Covid-19 QE Tapering

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This research was proposed to make an in-depth investigation of QE2’s impacts on Japanese banks since 2013 and the prospective fallouts of QE tapering on them. Keeping this broader objective in mind, AY 2022 has remained highly successful in making progress with the research. During the year, I was able to finish writing a working paper and get one research paper published in a Scopus-listed journal. Both publications focused on reviewing the BOJ’s QE-2 monetary policy since 2013 and how this policy has created challenges for banks through low interest rates, unsustainable loan-deposit ratios through high deposit accumulation, and COVID-19. Moreover, the research has found the initial financial impacts on commercial banks in Japan in terms of their return on assets, return on equity, interest margin, the status of non-performing assets, etc. The activities involved in the research include a literature review, an experience survey with a former BOJ executive, field visits, participating in a few seminars, and giving talks supported by the outcomes of the research.