Japan boosts CLO scrutiny as banks buy risky assets

TOKYO: Japanese regulators are surveying the nation’s financial firms to determine their exposure to foreign assets including risky credit products as the global economy slows, according to sources.

The Bank of Japan (BoJ) and Financial Services Agency want to get a fuller picture of domestic banks’ and insurers’ investments in collateralised loan obligations (CLOs) and leveraged loans to assess how they would fare if the borrowers run into difficulties, the sources said.