TOKYO - The new Basel III bank regulations requiring higher capital levels are "harsh", although Japan's banks have no need now to strengthen their capital further, said Masayuki Oku, chairman of the Japanese Bankers Association.
Global regulators, aiming to prevent any repeat of the international credit crisis, earlier this month agreed to force banks to more than triple to 7 percent the amount of top quality capital they must hold to withstand future shocks.
"That's very harsh for Japanese banks," Oku, who is also president of the core commercial unit of Sumitomo Mitsui Financial Group, told a regular news conference on Tuesday.
Still, Japan's three biggest banks -- Mitsubishi UFJ Financial Group, Mizuho Financial Group and Sumitomo Mitsui -- have already boosted their capital levels through a round of capital-raising in anticipation of the tougher new rules.
"We don't expect any capital-raising plans from individual banks in the near future," Oku said.
"Banks will try to expand their business and limit capital raising which could cause share dilution. That is going to be a trend in the industry," he said.
Oku also said that Japan's intervention in currency markets last week to curb a rise in the yen was effective but that the government had waited too long to take action.
"If intervention is done too late it takes a lot of energy and money to adjust the currency level, and I think there could have been better timing for the intervention," he said.
The yen surged to a 15-year high against the dollar last week of 82.87 yen -- much stronger than many Japanese firms' forecasts for around 90 yen -- threatening the outlook for Japan's export-reliant economy.
