---
title: "BOJ warns of financial system risks from investment fund activity"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/286519801.md"
description: "Bank of Japan's Kazushige Kamiyama warned that while investment funds are crucial for providing risk capital, they also pose risks to the financial system. He noted the growing presence of foreign hedge and private equity funds in Japan, which could lead to increased price volatility in markets. As Japanese institutions lend more to these funds, the risk of external shocks affecting domestic markets rises, highlighting the need for enhanced cooperation among global financial authorities."
datetime: "2026-05-15T06:45:21.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/286519801.md)
  - [en](https://longbridge.com/en/news/286519801.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/286519801.md)
---

# BOJ warns of financial system risks from investment fund activity

TOKYO, May 15 : Investment funds play a key role in supplying risk capital but can also pose potential risks to a country's financial system, Bank of Japan executive director Kazushige Kamiyama said in a speech released on the bank's website on Friday. Foreign hedge funds and private equity funds have increased their presence in Japan even though non-bank financial intermediaries (NBFI) account for just 30 per cent of total financial assets in the country, lower than the global share of 50 per cent, Kamiyama said. In recent years, private equity funds have increasingly facilitated business restructuring and mergers and acquisitions in Japan, he added. While NBFIs play a role in promoting economic growth by supplying risk capital, they can pose "potential risks to the entire financial system," Kamiyama said in the speech, which was delivered at a seminar on Thursday. "A sudden shift in capital movements by global hedge funds could exacerbate price volatility in bond and stock markets," he said. As Japanese financial institutions increase lending to foreign investment funds, there is a risk external shocks could spread instantaneously to domestic markets, Kamiyama said. "As NBFIs expand their global activities, cooperation among central banks and supervisory authorities across jurisdictions is becoming increasingly important," he said.

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