Rate cuts won't work properly: BoJ's Shirakawa

Masaaki Shirakawa, the governor of the Bank of Japan, has indicated that monetary policy's role in alleviating current conditions is likely to be limited.

In an exclusive interview with Central Banking journal, Shirakawa said: "Once banks and commercial firms experience a severe shortage of capital, monetary policy cannot function properly. For the economy to get back to a growth path, imbalances have to be eliminated."

Japan had in the nineties suffered from three imbalances: excess capital

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